“We may conclude by stating that each and every word of the Constitution, and the methodologies and procedures prescribed therein, must be strictly adhered to. When this is done, it dissipates misgivings and mistrust and steers away from pitfalls. This also avoids wastage of time, money and effort, as witnessed in this case. History is testament to the fact that whenever the Constitution is violated, it disrespects the people for whom it was made. Constitutional transgressions invariably have disastrous ramifications which, as we have learnt to our peril, undermine democracy and national unity”—Commissioner Inland Revenue, Karachi v Muhammad Mustafa Gigi and others (2022) 125 TAX 277 (S.C. Pak.)
The Federal Constitution Court (FCC) of Pakistan, established under the controversial Constitution (Twenty-seventh Amendment) Act, 2025 [27th Constitutional Amendment], in its short order dated January 27, 2026, by validating the constitutionality of the super tax imposed under sections 4B and 4C of the Income Tax Ordinance, 2001, has confirmed the apprehensions of a majority of the legal fraternity and members of civil society about its independence, impartiality, and acumen to interpret the provisions of the Constitution of the Islamic Republic of Pakistan (“the Constitution”).
The order has appeased the International Monetary Fund (IMF) and the Federal Board of Revenue (FBR), as both immediately expressed their jubilation. As per press reports, the IMF directed the FBR to make a recovery of the super tax immediately. This confirms beyond any doubt the State’s complete subjugation, where the lender of last resort not only prescribes anti-business and anti-people policies, but also acts as a revenue collector using its local agent, the FBR machinery, reminiscent of the East India Company’s similar operations through native gomashtas.
This time, the enabling role played by the highest constitutional court of the country for the IMF’s revenue-collection spree has hammered the final nail in the coffin of our so-called sovereignty. It is not only a brutal and naked attack on businesses, but also the murder of the supreme law of the land.
Pakistan’s constitutional history shows that the gravest violations are often committed not by open defiance but by subtle drafting. The so-called “super tax” imposed under section 4B of the Income Tax Ordinance, 2001, is a classic illustration. While public debate has largely revolved around its rate, duration, or economic impact, a more fundamental constitutional defect has gone almost entirely unnoticed: in pith and substance, section 4B is not a “tax” within the ambit of the Constitution, and therefore could never have been enacted as part of a Money Bill bypassing the Senate.
A levy that carries a declared social mission is a special exaction, not a tax stricto sensu
What makes this omission particularly striking is that Pakistan’s superior courts have already dealt with an almost identical impost—the Income Support Levy imposed through the Finance Act, 2013. The constitutional comparison between the two is unavoidable, yet conspicuously missing from the current discourse on the super tax and from the short order of the FCC.
The Income Support Levy Act, 2013, was imposed on certain taxpayers with a declared objective: uplifting economically deprived persons. The Supreme Court, while validating the Sindh High Court’s judgement, did not allow the legislature’s label to prevail over constitutional substance and held that it could not have been enacted through a Money Bill, as this deprived the Senate of its constitutional mandate to vote on it.
The Supreme Court also held that once a levy is purpose-specific, justified on welfare or social grounds, and morally anchored to a defined objective, it loses the essential character of a tax. Taxation, in the constitutional sense, is meant for the general revenue of the State, not for a declared, earmarked cause. This reasoning flowed from the settled constitutional doctrine that the nature of an impost is determined by its pith and substance, not by nomenclature. A levy that carries a declared social mission is a special exaction, not a tax stricto sensu.
When section 4B is examined through the same constitutional lens, the similarity is unmistakable. This super tax is not levied as part of a neutral income-tax structure, but as an extraordinary contribution imposed for the rehabilitation of internally displaced persons. This declared purpose is not ancillary; it is the very justification repeatedly advanced by the State. The constitutional identity between the two levies is striking:
- Income Support Levy was imposed to uplift economically deprived persons;
- Super tax for rehabilitation of internally displaced persons;
- Both were temporary, crisis-linked imposts;
- Both targeted selected categories of taxpayers; and
- Both were justified through declared social objectives.
This comparison is absent from judicial and academic discussion on the super tax, and finds no place in the short order of the FCC or in the orders of the High Courts endorsed by it.
The Supreme Court has consistently held that constitutional character is determined by substance over form. Legislative drafting cannot disguise the real nature of an impostor. Applying the pith and substance doctrine, section 4B is revealed not as a general income tax but as a solidarity levy imposed for a defined rehabilitative purpose. Such an impost is closer to a special contribution than to a tax meant to feed the general exchequer. Once this conclusion is reached, constitutional consequences follow inexorably.
Article 73 of the Constitution allows bypass of the Senate only in the case of a Money Bill, narrowly defined. A Bill qualifies in the constitutional sense only when it imposes, abolishes, or alters a tax. A levy that is purpose-oriented, earmarked, exceptional in character, and justified by reference to a specific cause does not fall within the scope of Article 73(2).
If the conclusion reached by the FCC is accepted, the clear line of demarcation between “tax” and “fee” will diminish, creating constitutional chaos
This was precisely the problem with the Income Support Levy Act, 2013. It was not merely a fiscal measure; it was a social-policy exaction. Section 4B suffers from the identical constitutional defect. To allow such a levy to be enacted through a Finance Act as a Money Bill is to permit constitutional evasion through drafting ingenuity.
In CIR v Muhammad Mustafa Gigi, the Supreme Court reaffirmed that taxation powers must be exercised strictly within constitutional limits. The legislature cannot, by clever phrasing, convert a constitutionally suspect impost into a valid tax. When read together with Durrani Ceramics [2014 SCMR 1630], the constitutional principle becomes clear: what is not a tax in substance cannot be treated as a tax for Article 73. If the Income Support Levy could not constitutionally pass as a Money Bill, the super tax under section 4B could not survive either—yet the FCC has held otherwise, ignoring unambiguous constitutional command.
This is not a case of procedural irregularity capable of post-facto validation. It goes to the root of legislative competence. A Bill that constitutionally required the Senate’s participation but was deliberately structured to avoid it is void ab initio.
Courts cannot permit constitutional form to triumph over constitutional substance. Otherwise, the Senate—a constitutionally mandated pillar of federal representation—can be rendered irrelevant by the simple expedient of attaching a moral label to any impost and smuggling it through a Finance Act.
The super tax under section 4B, imposed as income tax, is thus a constitutional anomaly. In pith and substance, it is indistinguishable from the Income Support Levy of 2013. Both were imposed for declared social purposes. Both departed from the concept of general taxation. Both, therefore, fell outside the scope of a Money Bill. What was constitutionally impermissible in 2013 cannot be sanctified today by a change of nomenclature. The judgement (short order) by the FCC, missing this vital point, has held otherwise:
“Section 4B is upheld as intra vires the Constitution and will apply as enacted for tax year 2015 and onwards… The legislature, therefore, was fully competent to impose, abolish, remit, alter, or regulate such tax through a Finance Act, as part of a Money Bill under Article 73(2)(a) of the Constitution of the Islamic Republic of Pakistan, 1973 (‘the Constitution’).”
In a review petition filed by the FBR, reported as (2023) 128 TAX 291 (S.C. Pak.), involving section 4B of the Income Tax Ordinance, 2001, it was vehemently pleaded that the levy imposed under section 4B was not “super tax” as envisaged under Pakistan’s tax treaty with Switzerland. Before the FCC, the stand is that it is a “tax”, hence part of a Money Bill.
For a “tax” to fall under the Federal Legislative List (Part I), it must be covered by Entries Nos. 43 to 53. It was the FBR’s stance that the imposition under section 4B was not “super tax” as envisaged under the Income Tax Law in Pakistan and, therefore, a 50 per cent concession under the Pakistan–Switzerland Agreement for Avoidance of Double Taxation could not be allowed.
Now, how the FCC has concluded that the super tax under section 4B is a tax—when an exaction for a specific purpose can never be so under the Constitution—remains unexplained. Deviating from established tax jurisprudence, it will be a novelty to see the reasoning for this conclusion when the detailed judgement becomes public.
If the conclusion reached by the FCC is accepted, the clear line of demarcation between “tax” and “fee” will diminish, creating constitutional chaos. The constitutional scheme for imposing a “tax” or a “fee” is clearly bifurcated between subjects given to the Federation and the federating units, respectively. The FCC’s order, in actuality, amounts to blurring the distinction between “tax” and “fee”, completely forgetting the constitutional command.