Court Questions Why Super Tax Funds Were Not Fully Used for Displaced Persons

A judge of the Federal Constitutional Court has raised serious concerns over the utilization of funds collected through the super tax, questioning why the majority of the money was not spent on the rehabilitation of internally displaced persons (IDPs), which was the stated purpose of the levy.

During court proceedings, Justice Syed Hassan Azhar Rizvi noted that approximately Rs. 144 billion was collected through the super tax between 2015 and 2020, but only Rs. 37 billion was actually spent on the rehabilitation of displaced people. He observed that this significant disparity undermined the very objective for which the tax was imposed.

Justice Rizvi, who is part of a three-member bench, remarked that such limited utilization of funds frustrated the intent behind Section 4B of the Income Tax Ordinance, under which the super tax was introduced.

The bench, headed by Justice Aminuddin Khan, was hearing appeals against earlier verdicts issued by the Sindh High Court, Lahore High Court, and Islamabad High Court regarding the legality and continuation of the super tax.

The super tax was initially introduced through the Finance Act 2015 as a temporary measure to generate funds for the rehabilitation of internally displaced persons affected by security operations. However, the court’s observations have raised questions about financial transparency and whether the levy continued to serve its original purpose.

The case highlights broader concerns over fiscal accountability and the use of public funds collected under special taxation measures.