ISLAMABAD: The Federal Constitutional Court (FCC) issued notices to the respondents in review petitions filed by the Federal Board of Revenue (FBR) regarding the constitutional validity of the Income Support Levy Act, 2013. A two-judge bench, headed by Justice Amin-ud-Din Khan, last week, after hearing the arguments of Asma Hamid, who represented the Commissioner of Inland Revenue, had reserved the judgment, which was announced in the courtroom on Tuesday. The bench directed the office (FCC) to fix all these cases after notices were issued to the respondents. READ ALSO: FCC upholds parliament’s authority to pass tax laws with retrospective, prospective effects The Income Support Levy Act, 2013, was enacted through section 9 of the Finance Act, 2013. It imposed a levy of 0.5 percent on the net moveable wealth of individuals exceeding Rs1 million for Tax Year 2013, with proceeds directed towards the Income Support Programme for economically distressed persons and families. The levy was subsequently repealed by the Finance Act, 2014. The levy was challenged before the Sindh High Court, which had ruled in favour of taxpayers, having net moveable assets worth more than one million rupees, and declared it ultra vires the Constitution. The Lahore High Court had also struck down levy on the identical grounds as the SHC judgment. The respondents’ stance was that the imposition of a 0.5 per cent income support levy on the net value through the Income Support Levy Act 2013 was unconstitutional, as it did not have the characteristics of a tax and was discriminatory because it created unreasonable classification within the same class. The FBR preferred appeals before the Supreme Court, which were dismissed. The department then filed review petitions, which were pending before the apex court. However, after the enactment of the 27th Amendment, the review petitions were transferred to the Federal Constitutional Court, which is vested with exclusive jurisdiction to settle matters arising for constitutional interpretation. The Supreme Court judgment noted, “The Act itself did not state that the income support levy was or constituted a tax or taxation. Leaving semantics aside, an examination of the act makes it abundantly clear that it neither came within the definition of tax nor taxation. The act was social legislation with the declared objective of poverty alleviation. Though a worthwhile objective, it did not bring the act within the definition of a money bill. “Since the act was not a money bill, it had to be passed by both houses [the National Assembly and the Senate], as provided by Article 70 of the Constitution.” The act also suffered from other insurmountable constitutional shortcomings, the court highlighted. The court order stated, “In the absence of any legislative mechanism to secure the amounts collected as income support levy for the stated objective of poverty alleviation, such amounts would be deposited and become part of the federal consolidated fund, becoming indistinguishable from other monies therein. Monies which are set aside for particular purposes are referred to as expenditure charged upon the fund, and these are mentioned in Article 81. “The expenditure charged upon the fund includes the remuneration of the president, judges, chief election commissioner, chairman and deputy chairman of the Senate, speaker and deputy speaker of the National Assembly, and the auditor-general of Pakistan and the administrative expenses of their respective offices. “The Act did not declare that the amounts recovered pursuant to the Act were to be charged in any specific manner on the fund. Resultantly, the amounts raised by the income support levy would go into the fund and would have to be distributed pursuant to the mechanism provided in the Constitution. Copyright Business Recorder, 2026