Court allows tax credit adjustment

According to The Express Tribune, the Federal Constitutional Court has ruled that corporate taxpayers can adjust tax credits against super tax. Justice Aamir Farooq wrote the six-page detailed judgment, which allowed appeals filed by the mobile phone operator Zong.

The bench found that credit generated through filing and deduction can be set off against super tax. It described the credit under Section 168 of the Income Tax Ordinance as a distinct and recognised entitlement belonging to the taxpayer. Compelling a company to pursue only a refund, the court said, ran against the intent of the legislation. Fiscal laws, it added, must be read with the aim of benefiting and facilitating taxpayers.

The court has instructed the FBR to review and decide the taxpayer's adjustment request, lodged after the court's notice, in line with the law. The case record shows that the FBR had issued Zong a notice seeking super tax payment. Zong then approached the Islamabad High Court seeking to offset its existing credit, but that court dismissed the petition. The Federal Constitutional Court later reversed that judgment and accepted Zong's appeals.