LAHORE: Lahore High Court (LHC) has issued notices to Federal Board of Revenue and the President of Pakistan, who have ignored the FTO’s order, in which FBR was directed to take immediate steps to stop anomalies in income tax slabs for salaried class under Finance Act, 2012.
As per the order, the FTO has proposed revision in the tax slabs number 4, 5 and 6 to give major tax relief to salaried persons falling within these categories.
Source said that Law and Justice Division has issued an order in which the President has accepted the representation of FBR under section 32 of the FTO Ordinance, 2000 in C No SUO MOTO (1)1100/2012 (Waheed Shahzad Butt Vs Secretary Revenue Division, Islamabad). A petitioner, Waheed Shahzad Butt, under Article 199 of the Constitution of Pakistan has challenged the president’s order before the LHC.
The petitioner pointed out that though the salaried taxpayers have been provided tax relief but this benefit would be gradually decreased with the increase in salary under the new slab structure for the salaried class as per Finance Act 2012. However, in the last three slabs where the fixed component does not tally with the maximum tax factor of earlier slab, it was an error of commission at the part of FBR, which was thrown away by the FTO under Own Motion action.
Earlier, the FTO has proceeded to direct FBR to immediately address the anomalies in the said income tax slabs introduced under clause (1A) of First Schedule, Part I, Division I of Income Tax Ordinance, 2001. He observed that tax computation mechanism introduced through Finance Act, 2012 militates against the principles of horizontal and vertical equity and violative of Articles 4 and 25 of the Constitution and as such tantamount to maladministration. He further observed that Finance Act, 2012 appears to have been passed without a debate or discussion in the Parliament and any assistance by FBR.
