Dr. Ikramul Haq
Eighteenth Amendment of the Constitution, 1973, consciously embraced the ethos of cooperative federalism, wherein legislative fields are not rigid silos but at times interacting spheres—Attock Cement Pakistan Ltd v Province of Balochistan and another, Civil Petition No. 315 of 2024, Federal Constitutional Court of Pakistan
The tax realized form part of general revenue of the State whereas cess imposed for specific object and purpose, is not part of the general revenue, but must be utilized for the attainment of the purpose and object of the imposition—D G Khan Cement v The Province of Punjab [2014 PTD 478 High Court Lahore]
One of the most persistent misunderstandings in Pakistan’s constitutional discourse in the wake of Constitution (18th Amendment) Act, 2010 [18th Amendment] concerns taxation: who may impose it, who may alter it, and who—if anyone beyond the National Assembly—can legitimately obstruct it. This confusion, often fuelled by an exaggerated reading of the role of Pakistan’s Senate under Article 73, is accentuated by invoking provincial autonomy under Article 142 of the Constitution of the Islamic Republic of Pakistan [“the Constitution”], as if the 18th Amendment somehow has diluted parliamentary fiscal supremacy.
A careful reading of the Constitution—particularly Articles 73, 75(4), 141, 142, 143, 160, 161 and 162—demonstrates that while the 18th Amendment redistributes revenues, it does not redistribute taxing authority.
Article 77: No taxation without representation
In Mustafa Impex, Karachi v Federation of Pakistan (PLD 2016 SC 808), the Supreme Court laid down principles of enduring relevance to fiscal federalism. It held that financial authority flows strictly from the Constitution (para 28), that such authority is distributed rather than concentrated (paras 33–34), and that no organ of the State may appropriate financial power beyond what the Constitution expressly confers (para 37). This pronouncement directly negates any claim that Parliament enjoys an inherent or residual power to levy taxes for its exclusive fiscal use.
One of the most revealing silences in the Constitution is the absence of any provision comparable to Article 271 of Constitution of India, which empowers the Indian Parliament to impose surcharges on otherwise shareable taxes for the exclusive use of the Union. This silence is neither accidental nor innocuous. It represents a conscious constitutional choice—one that Pakistan’s superior courts have repeatedly guarded against erosion.
Indian fiscal centralism, constitutionally entrenched through Article 271, has often been cited—sometimes casually, sometimes opportunistically—to justify federal levies in Pakistan that are sought to be ring-fenced for exclusive federal use. Pakistani constitutional jurisprudence, however, has consistently rejected such analogies, insisting that taxation under the 1973 Constitution is inseparable from the National Finance Commission (NFC) framework—it will be explained in detail in a separate article.
Article 73: fiscal unicameralism deliberately preserved
Article 73 of the Constitution continues, even after the 18th Amendment, to treat taxation as a constitutionally protected domain of the National Assembly. Money Bills, including all taxation measures, must originate in the National Assembly.
The Senate may make recommendations, but these remain advisory. The National Assembly may accept them or ignore them; if it does nothing, the Bill is deemed passed in the form originally transmitted. This design is not accidental. The 18th Amendment substantially enhanced the Senate’s role in ordinary legislation, yet it consciously preserved fiscal unicameralism.
Taxation, as a coercive exaction affecting property, livelihood and enterprise, was deliberately kept under the control of the directly elected House [National Assembly]. The Supreme Court has repeatedly underscored that such exactions must remain accountable to the electorate through its chosen representatives. The Supreme Court has repeatedly clarified that the “Federation” under the Constitution is a composite constitutional entity, comprising both the Centre and the Provinces.
Senate recommendations: consultation, not co-decision
Those who argue that Senate recommendations under Article 73 amount to shared fiscal sovereignty overlook both constitutional text and structure. Recommendations are neither binding nor suspensive. They do not operate as a veto, nor can they constitutionally delay a Money Bill.
Where the Constitution uses the language of recommendation rather than consent, it does so deliberately. Judicial interpretation cannot convert consultative participation into decisional authority. To do so would amount to constitutional amendment by interpretation—a course consistently rejected by constitutional jurisprudence.
Article 141 & 142: allocation of subjects, not fragmentation of power
Article 142 is frequently invoked to support the claim that enhanced provincial autonomy has diluted federal taxing power. This rests on a misunderstanding. Article 142 is an enabling and distributing provision. It allocates legislative competence between Parliament and the Provincial Assemblies.
Taxation remains expressly enumerated in the Federal Legislative List. Article 142 therefore confirms Parliament’s taxing authority; it does not fragment it. Provincial autonomy after the 18th Amendment is vertical—between the Federation and the Provinces—not horizontal within Parliament itself. Judicial scrutiny of federal-provincial relations has repeatedly cautioned against confusing the allocation of subjects with parliamentary procedure.
The imposition of any kind of legislation that include levy or any tax or duty, cess etc. having extraterritorial impact and/or involving entities operating on trans-provincial levels by any provincial assembly is patently against Article 141. In the same manner, any legislation encroaching upon the rights of provinces by the National Assembly, violating Article 142, will be ultra vires of the Constitution, hence, void ab initio.
Article 143 & 144: the constitutional supremacy clauses
Article 143 performs its classic role as the supremacy clause. Where a provincial law is repugnant to an Act of Parliament, the parliamentary law prevails. When read alongside Articles 73 and 77, its effect is decisive: Parliament’s will in fiscal matters is expressed through the National Assembly.
The Supreme Court has described Article 143 as a constitutional mechanism designed to prevent legislative paralysis in areas requiring national coherence. Taxation is foremost among such areas. Any attempt to elevate Senate participation into a co-equal taxing role would not only contradict Article 73 but also render Article 143 functionally redundant.
Article 144 says: If one or more Provincial Assemblies pass resolutions to the effect that Majlis-e-Shoora (Parliament) may by law regulate any matter not enumerated in the Federal Legislative List in the Fourth Schedule, it shall be lawful for Majlis-e-Shoora (Parliament) to pass an Act for regulating that matter accordingly, but any act so passed may, as respects any Province to which it applies, be amended or repealed by Act of the Assembly of that Province.
Section 144, undoubtedly, provides the practical procedure for strengthening cooperative federalism. Parliament can regulate any matter not enumerated in the Federal Legislative List in the Fourth Schedule to Constitution if one or more provincial assemblies so desire by jut passing resolution(s) to the said effect.
Mr. Justice Aamer Farooq of Federal Constitution Court of Pakistan in Attock Cement Pakistan Ltd v Province of Balochistan and another, Civil Petition No. 315 of 2024 quoted the following paragraph from Pakistan College of Law v University of the Punjab, W.P No. 45178 of 2017, Lahore High Court that explicitly ‘cooperative federalism’ as enshrined in 1973 Constitution:
Under our constitutional fabric, the Federation and the Provinces do not function in isolation but advance in harmonious cadence, bound together in pursuit of prosperity, economic vitality, and national security as envisioned by the constitutional compact. Cooperative federalism, as our constitutional philosophy, rejects isolation; it demands that state institutions be interwoven strands of a single fabric, collectively striving toward a unified constitutional destiny. Chapter 2 of Part V breathes life into this vision by mandating intergovernmental cooperation and coordination in both administrative and legislative spheres, affirming the Constitution’s dynamic vitality. This collaborative architecture has been judicially recognized as a form of “marble-cake” federalism, where responsibilities and powers blend rather than divide.
[Emphases by way of bold and underlines are that of author and not by the Court]
The President’s role: formal, not fiscal
Even where Article 162 envisages presidential involvement, the role of the President is purely formal. The President does not originate taxes, veto them, or vary their incidence. Judicial pronouncements examining the constitutional role of the President have characterized it, in fiscal matters, as procedural rather than discretionary—intended to give effect to decisions already taken by Parliament and constitutional bodies.
Article 75(4): finality of Money Bills
Article 75(4) supplies the constitutional seal. Once a Money Bill is passed in accordance with Article 73, it is not subject to return or obstruction. Presidential assent does not operate as a second fiscal filter. The Supreme Court has treated Article 75(4) as a provision of constitutional finality, insulating taxation from delay or institutional bargaining once the elected House has spoken.
Conclusion: cooperative federalism
The cumulative effect of Articles 73, 77, 75(4), 142, 143, 160, 161 and 162 is neither accidental nor ambiguous. They form a deliberately integrated constitutional design in which the power to tax is unified, democratically accountable, and procedurally insulated, while the benefits of taxation are shared equitably within the federation—the true purpose of cooperative federalism.
The distinction—between the authority to levy and the obligation to distribute—lies at the heart of Pakistan’s fiscal federalism and is the point most frequently lost in contemporary debates.
The 18th Amendment unquestionably altered the balance of the federation. It enhanced provincial autonomy, strengthened the Council of Common Interests, and widened provincial shares through successive NFC awards. However, it did so without disturbing the constitutional source, procedure, or finality of taxation.
To read the 18th Amendment as having silently federalized the taxing power—by elevating Senate recommendations, expanding presidential discretion, or blurring Article 142’s allocation of subjects—is to attribute to the Amendment what its text neither states nor implies.
Taxation, under the Constitution, remains a coercive exaction justified only by democratic accountability. That accountability flows through the National Assembly alone. The Senate’s role is consultative, valuable for deliberation but constitutionally non-decisional.
Provincial participation is secured not through fragmented taxation but through guaranteed revenue sharing under Article 160 (NFC mechanisms). The President’s role is formal, ensuring constitutional continuity, not fiscal arbitration. Article 75(4) then closes the door to institutional bargaining once the elected House has spoken.
Equally important is the recognition that tax exemptions are not a peripheral matter. They go to the very substance of taxation and must be treated with the same constitutional seriousness as the imposition of a levy. Allowing bodies that cannot impose a tax to dismantle it indirectly through statutory regulatory orders (SROs) granting exemptions/concessions would hollow out parliamentary fiscal authority and defeat the discipline the Constitution seeks to impose.
At a time when Pakistan faces chronic revenue shortfalls, persistent budgetary instability, and growing intergovernmental tensions over resources, constitutional clarity on taxation is not an academic luxury. It is a fiscal necessity. Misreading the Constitution to create veto points where none exists does not strengthen federalism; it paralyses governance. Federalism thrives when authority is clear and outcomes are shared—not when power is diffused without responsibility.
The constitutional message is therefore simple but firm. Federalism after the 18th Amendment is participatory in distribution, not fragmented in taxation. Parliament taxes through the National Assembly. Revenues are shared through constitutional mechanism. Disputes are resolved through Article 143. Finality is secured through Article 75(4). Any departure from this scheme is not progressive federalism; it is constitutional distortion.
In the end, respect for the carefully balanced architecture of cooperative and participative federalism is essential not only for constitutional fidelity but for fiscal stability itself. Without it, meaningful debates over balance budgets and fair taxes will continue to oscillate between political posturing and institutional overreach—at the expense of both constitutional order and economic governance.
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Dr. Ikramul Haq, Advocate Supreme Court, Adjunct Faculty at Lahore University of Management Sciences (LUMS), member Advisory Board and Visiting Senior Fellow of Pakistan Institute of Development Economics (PIDE), holds LLD in tax laws. He was full-time journalist from 1979 to 1984 with Viewpoint and Dawn. He also served Civil Services of Pakistan from 1984 to 1996.