People Leaving Pakistan Due to High Taxes, Lawyers Argue in Super Tax Case

Islamabad: Lawyers representing companies in the Super Tax cases told the Federal Constitutional Court that excessively high taxation is forcing people and businesses to leave Pakistan.

A three-member bench headed by Chief Justice Ameenuddin Khan heard the super tax petitions. During the proceedings, counsel for various exporting companies, Rashid Anwar, concluded his arguments, while Ijaz Ahmed, representing tobacco companies, also completed his submissions.

Rashid Anwar argued that the Islamabad High Court had previously ruled that tax rates should not be less than 15 percent and should not exceed 55 percent, yet businesses are currently paying taxes above this threshold. He said high taxation has driven businessmen to relocate their operations to countries such as Dubai, where tax rates are significantly lower.

“The businessman needs profit, but here losses are being incurred,” Anwar said, adding that businesses are currently paying up to 61 percent tax, making operations unsustainable.

During the hearing, tobacco companies’ lawyer Ijaz Ahmed stated that out of a cigarette pack sold for Rs. 130, nearly Rs. 98 is collected as tax, while a pack priced at Rs. 48 carries Rs. 40 in taxes. However, FBR’s counsel Asma Hamid rejected these figures, saying they do not match official records.

Ijaz Ahmed further argued that the government has selectively imposed super tax on certain sub-sectors rather than across the board. In response, Chief Justice Ameenuddin remarked that it is the government’s prerogative to include or exclude any sector from taxation, a point the lawyer agreed with. Ahmed also contended that tax classification should be based on income rather than business type, to which the Chief Justice responded that classification would become impossible if taxation were imposed solely on income.

The court was also told that smuggled cigarettes enter Pakistan at cheaper prices than locally manufactured products. Justice Hasan Azhar Rizvi questioned how imported cigarettes evade detection, while the lawyer noted that locally produced cigarette packs carry mandatory health warnings.

When asked whether cigarettes can be legally imported into Pakistan, Ijaz Ahmed replied that imports are allowed, but to his knowledge, no such imports have taken place so far. The Chief Justice humorously remarked that the bench’s questions should make it clear that none of the judges are smokers.

After the completion of arguments by Ijaz Ahmed and private companies’ counsel Abid Shaban, the court adjourned the hearing until tomorrow.