LAHORE:
Punjab Assembly Speaker Malik Muhammad Ahmad Khan has declared recent government announcements on revision of agricultural income tax rates as illegal and ordered an immediate halt to their enforcement, assessments and collections.
The decision came during the 41st session of the Punjab Assembly on a privilege motion moved by MPA Zulfiqar Ali Shah.
The Speaker found that the notices lacked legal validity as they were not submitted to the Assembly in accordance with statutory requirements.
He directed the excise and taxation department to suspend the implementation of the revised rates and directed the government to submit the relevant notifications to the house within 15 days along with a detailed report explaining the lapse.
The matter has also been referred to the Committee on Law Reform and Delegated Legislation to determine responsibility and submit findings within a month.
The issue stems from notifications issued on March 5, 2025, revising agricultural income tax rates, followed by another notification on September 10, 2025, seeking retrospective effect from July 1, 2025.
The proposer of the motion argued that these were not placed before the Assembly at the time of the budget for 2025-26 as required under Section 11(2) of the Punjab Agricultural Income Tax Act, 1997. In his ruling, the Speaker emphasized that taxation powers are vested in the legislature which is delegated strictly according to the constitution and any delegated procedure.
He noted that failure to present such notices to the Assembly renders them ineffective and without legal basis.
The Speaker also termed the omission a breach of parliamentary privilege and reiterated the importance of legislative oversight on tax matters.
He cited relevant legal precedents, including decisions of superior courts, to support the requirement to present tax notices to the legislature.
He further directed that all future changes in agricultural income tax rates must be introduced before the assembly during the annual budget session to be enforceable. The decision clarified that taxpayers affected by the now void notices can seek relief through appropriate legal forums regarding recovery made under the revised rates.
