Islamabad: The Islamabad High Court has sought a response from the FBR and other parties, while suspending the imposition of a 40% additional tax on bank fund flows until December 8th.
The private bank’s application was heard by Justice Sardar Ijaz Ishaq Khan of the Islamabad High Court. The applicants’ lawyers, Salman Akram Raja and Asad Laldha, informed the court that on November 21, 2023, the government had issued an SRO number 1588(1) under Section 99D of the Income Tax Ordinance 2001, imposing a 40% additional tax on bank fund flows, which was due by November 30th.
The lawyers argued that Section 99D of the Income Tax Ordinance 2001 gives the federal government the authority to levy a tax of 0 to 40%, which is contrary to Article 77 of the constitution.
The lawyers also argued that “this SRO was issued by the Finance Division, which does not have the authority to impose a new tax. The matter of the additional tax under Section 99D must be presented in the National Assembly. It is necessary for the notification of the additional tax to be presented in the National Assembly, and if the National Assembly is present, it is quite possible that it will not support the notification of the additional tax, and if the National Assembly does not support the additional tax, it will not be imposed.”
They requested the court to declare the notification of the 40% additional tax on bank fund flows illegal and to suspend the notification until the decision on the application is made.
After hearing the initial arguments of the applicants’ lawyers, the court suspended the notification until December 8th, while issuing a notice to the FBR’s lawyer, Osama Shahid Advocate, during the hearing. The court also directed the Attorney General to issue a notice for legal assistance.