Pakistan’s Federal Constitutional Court has upheld the Super Tax, delivering a major fiscal win for the federal government and clearing the way for more than Rs. 300 billion in long-stalled revenue. The landmark ruling settles a long-running legal dispute and restores the government’s authority to collect the controversial levy from large corporations.
In its reserved judgment announced on January 27, 2026, the Federal Constitutional Court ruled that Section 4C of the Income Tax Ordinance, 2001, commonly known as the Super Tax, is constitutional and lawful. The court held that Parliament has exclusive authority to impose taxes and rejected claims that the levy amounted to discrimination or double taxation.
The verdict overturned earlier rulings by the Lahore High Court and Islamabad High Court, both of which had previously struck down the tax on constitutional grounds.
The decision is expected to immediately unlock over Rs. 300 billion that had remained blocked due to stay orders obtained by businesses. More than 150 companies across sectors including manufacturing, banking, energy, and telecommunications will now be required to clear outstanding Super Tax liabilities.
A three-member bench headed by Chief Justice Amin-ud-Din Khan heard the case. During the proceedings, the Federal Board of Revenue (FBR) argued that the Super Tax was introduced to meet urgent economic and fiscal challenges faced by the country.
Legal and economic experts say the ruling strengthens the government’s fiscal authority at a time when Pakistan is under pressure to boost revenues and meet budgetary targets. However, the decision is being seen as a setback for large corporations that had challenged the tax for years.
“This judgment reinforces Parliament’s power to impose extraordinary taxes during economic stress,” a senior tax expert said, adding that the ruling may discourage future legal challenges against similar fiscal measures.