15 percent surcharge also applicable on salaried class

The imposition of 15 percent surcharge on income tax for Tax Year 2011 would also be applicable on salaried class with immediate effect. Legal experts told Business Recorder here on Tuesday that the surcharge would be applicable on salaries paid after March 15 2011 and before June 30, 2011. The 15 percent tax would be applicable on the already deducted tax, directly affecting the salaried class already overburdened with inflation and indirect taxation.
They said the Income Tax (Amendment) Ordinance, 2011 stipulates surcharge @ 15% of the Income Tax Payable for the Tax Year 2011. The specifically identified taxes are those stated in Part V of Chapter X and Chapter XII of the Ordinance. This means that this surcharge will be collected on Advance Tax payable under section 147 and withholding of tax on all provisions, including imports; salary; dividends; profit on debt; payments to non-residents; payments for supply of goods, contracts and services; non-resident media; exports; property income; prizes and lottery; petroleum products; on pension funds; cash withdrawals; cash transactions in banks; on private vehicles; brokerage and commission; transactions on stock exchange; CNG stations; electricity consumption; telephone users; auction and purchase of domestic air tickets.
Experts said that it has also been stated that the surcharge shall be paid, collected, deducted and deposited at the same time and in the same manner as the tax is paid, collected, deducted and deposited under relevant provisions of this Ordinance including Chapter X or Chapter XII of this Ordinance. This means that not only the surcharge will be paid on the tax withheld but also when the tax is paid while filing the tax return for the Tax Year 2011. It also means that the surcharge is to be paid for the full tax year 2011. The Ordinance, however, seems to have some legal issues that need to be clarified.
According to legal experts, the first lacuna will be that the Section 4A (1) clearly states the applicability of the surcharge from the date of promulgation to June 30th 2011. The big question: how come it will be applicable on the period prior to promulgation?
"If a person who does not have to pay any tax at the time of filing of the tax return (ie, his total tax liability has been deducted at source) then how will it be applicable to such a person?," they raised another question. The Ordinance does not clearly apply to past and closed transactions; it has no clear retrospective effect. This will also be for the courts to decide, legal experts added.