The Supreme Court on Monday heard petitions challenging the imposition of a super tax on provident funds, with judges questioning whether such a levy is valid when income tax itself is exempt.

A five-member bench led by Justice Aminuddin Khan examined whether provident funds, which enjoy statutory relief under the Income Tax Ordinance, could be subjected to additional taxation. Justice Muhammad Ali Mazhar pointed to Section 53 of the law and asked if a trust fund could be treated as private property.

Justice Hasan Azhar Rizvi warned that repeated super tax deductions could erode retirement benefits over time, while both Rizvi and Mazhar expressed concern about how advance super tax could be calculated without final profit figures.

The Additional Attorney General argued that exemptions under the Second Schedule also cover super tax but said the government retains authority to impose levies if fiscal needs require. Counsel Asma Hamid countered that imposing super tax on provident funds contradicts legislative intent and undermines statutory relief.

Federal Board of Revenue counsel Hafiz Ehsan began his submissions, indicating he would address constitutional issues and adopt earlier arguments. The hearing was adjourned until Tuesday due to scheduling constraints.

The petitions argue that the super tax, introduced in the 2022–23 budget at rates of up to 10% on major industries, exceeds constitutional limits. The FBR previously informed the court that the Lahore High Court had upheld the tax under Section 4C of the Income Tax Ordinance but reduced the rate to 4% for 16 sectors, including banking.