The Federal Constitutional Court (FCC) on Tuesday declared the super tax constitutionally valid, setting aside earlier judgements of the high courts and affirming parliament’s exclusive authority to impose taxes under the Constitution.
Read More: FCC adjourns hearing of super tax case until today
In a landmark ruling, the FCC upheld Sections 4-B and 4-C of the Income Tax Ordinance (ITO) 2001, which were introduced through the Finance Acts of 2015 and 2022. The court ruled that the provisions would apply from the dates they were originally levied at the prescribed rates, rejecting arguments that the tax amounted to retrospective or double taxation.
Various businesses, banks and corporate entities had challenged the levy before the Sindh, Lahore and Islamabad High Courts, which had issued conflicting rulings. Appeals were later filed before the Supreme Court, and after 71 hearings, the cases were transferred to the FCC following the passage of the 27th Constitutional Amendment.
اہم ترین👇
ہائیکورٹس کا قانون کو امتیازی قرار دینا درست نہیں تھا
آئینی عدالت نے اپنے فیصلے میں سپر ٹیکس کو درست قرار دے دیا.
وفاقی حکومت کو فیصلے سے تین سو ارب سے زائد کا فائدہ جبکہ بڑی بزنس کمپنیوں کو جھٹکا..
یہ اربوں کمانے والے مگر مچھ چھوٹی عدالتوں کو مینج کر لیتے تھے لیکن… pic.twitter.com/nuDrrxGj7z— چوہدری شاہد محمود (@CSMR786) January 27, 2026
A three-member bench headed by Chief Justice Aminuddin Khan, and comprising Justice Syed Hasan Azhar Rizvi and Justice Syed Arshad Hussain Shah, announced the short order. The detailed judgement will be issued later.
According to counsel for the revenue authorities, the ruling settles more than 2,200 pending tax cases and safeguards an estimated Rs310 billion in government revenue.
The super tax was first imposed in 2015 as a one-time measure to fund rehabilitation efforts in areas affected by Operation Zarb-i-Azb. It initially applied an additional five per cent levy on profits exceeding Rs300 million. In 2022, the scope of the tax was expanded to include individuals earning over Rs150 million annually, with rates reaching up to 10 per cent.
The FCC ruled that determining tax policy, slabs, rates and thresholds fell solely within parliament’s domain, and that courts were limited to interpreting the law. It held that the high courts had exceeded their jurisdiction, violating the principle of separation of powers, and declared their judgements constitutionally invalid.
Read More: FCC upholds super tax in landmark ruling
The court granted limited relief to oil and gas exploration companies, allowing them to seek exemptions on a case-by-case basis under petroleum concession agreements. However, industry representatives warned that the ruling could lead to higher inflation and production slowdowns as companies adjust to the tax burden.