The Supreme Court (SC) on Monday rejected the appeals filed by the Federal Board of Revenue (FBR) regarding levying additional tax on the salaried class.
A three-member bench of the apex court, headed by Chief Justice of Pakistan (CJP) Justice Umar Ata Bandial, heard the appeals.
During the hearing of the appeals, Justice Mansoor Ali Shah asked the lawyers representing the FBR as to what was the logic behind levying 30 per cent tax on those drawing Rs1 million in salary in the corporate sector.
“We want to know the reason behind that,” CJP Justice Umar Ata Bandial insisted.
Justice Qazi Faez Isa went even further and said the court wanted to know as to why the tax was not imposed on the lawyers who were paid Rs1 million in fee. “Similarly, we are interested in knowing as to why you did not levy tax on the businessmen having income of Rs1 million,” he said, and added, “Many people in Pakistan earn more than Rs1 million.”
The Board’s lawyer replied that the additional tax had been levied only on ‘bonus’.
Justice Mansoor asked, “Is bonus not part of the salary?”
Addressing the FBR lawyers, Justice Isa remarked that they were free to tax as much as they could. “But treat all professions alike; don’t make a discrimination between the people belonging to different professions,” he asserted.
Speaking on the occasion, the additional attorney general (AAG) said that it was the government’s discretion who to tax and how much.
Justice Mansoor said that when a company earned profit, it gave bonus to its employees. “But instead of taxing owner of the company, you levied tax on its employee,” the judge regretted.
The AAG said that it was the corporate sector which the government had taxed.
“And what is the definition of the corporate sector?” Justice Mansoor questioned.
The AAG replied there was no definition.
The CJP again said he was at a loss to understand what led the government to levy additional tax on the salaried class.
