Page 39 - The Pakistan Accountant January-March 2018_Neat

is final and nothing will be payable above final tax as specified income from business earned by Association of Persons (AOP) in Section 4 and 169(b). The introduction of Section 4B creates shall be round 35%. However, super tax rate is same for both conflict with Section 4 and makes liable certain persons to pay category of person. above final tax. Further, the federal government made Section 4B new charging Section which has no provision to have Further, super tax is levied @ 4% on all banking companies overriding effect over Section 4. In view of this, the super tax is irrespective of amount of income and @ 3% on all persons not sustainable for person whose income falls under final tax other than banking companies having income exceed 500 regime. million. ▪ As per Section 4B(3), the super tax payable shall be paid, ▪ The principle of tax is that tax should be unambiguous and collected and deposited on date and in the manner as tax payer should be aware what amount to pay and when and specified in sub section 1 of Section 137. However, Section how long he is required to pay. The federal government every 137(1) says that the tax payable by a taxpayer on the taxable year extended this levy. Initially, it was levy for one time for tax income of the taxpayer including the tax payable under year 2015. Further, the federal government always imposed tax Section 113 or 113A for a tax year shall be due on the due vide Finance Act for tax year which has already closed. date for furnishing the taxpayer’s return of income for that year. ▪ A title of Section 4B shows that this levy is collected for rehabilitation of displaced persons. This is collection for The perusal of above reveals that super tax is due when welfare. As per amendments made through the Constitution return to file is due. It is settled law that statement and return (Eighteenth Amendment) Act 2010 in the Constitution of under Sections 115(4) and 114(4) run parallel to each other Pakistan, the subject of social welfare has been made a provincial subject and the federation cannot legislate on it. and person whose income falls under final tax regime is not required to file return. When filing of return is not required, it Please note that the purpose for which super tax was levied has almost been resolved then why now such extra direct tax is means the super tax on person whose income falls under final still levied on specified category of taxpayers. tax regime is not due. ▪ Finally, in Pakistan, the compliant taxpayers are already ▪ Article 3 of the Constitution stated elimination of exploitation: complaining that they are not getting any benefit against the The state shall ensure the elimination of all forms of direct taxes that they are paying and super tax is in addition to exploitation and gradual fulfillment of fundamental principles, what they are already paying. from each according to his ability, to each according to his work. It is settled law that classification for the purpose of taxation shall be reasonable. In normal course without involving super tax, reasonable classification is already made. The income from business earned by company is subject to The writer is a chartered accountant working as partner at tax @ 31% for tax year 2017 and maximum rate for taxation of Ali Akhtar & Co., Lahore. January - March 2018 The Pakistan Accountant 37