Sindh Assembly: Ruling party to table tax on services bill in next session

Sindh govt decides to discuss services tax in February's session.

KARACHI: The Sindh government has decided to bring up a ‘Sindh Sales Tax on Services Bill’ in February’s session of the Sindh Assembly.

The government decided on Tuesday to introduce this tax on services during a meeting held at Chief Minister House.

Officials told The Express Tribune that after forming the Sindh Revenue Board, it was necessary to make a law so that the Sindh government can collect the revenue generated from the tax.

Therefore the chief minister directed all the relevant officials to speed up the process to get the legislation into the House for a vote.

Sindh Finance Minister Murad Ali Shah, Chief Secretary Ghulam Ali Pasha, Additional Chief Secretary Planning and Development Ishaque Lashari, Finance Secretary Siddique Memon and Sindh Revenue Board chairperson Nazar Muhammad Mahar were among those who attended this meeting.

Sindh will not backtrack from its stand on collecting taxes on different items, including ports and shipping, and telecom, etc., officials said. The new legislation will be prepared before the budget, said a CM House statement.

The Express Tribune also learnt that the Sindh Revenue Board, which was established to collect taxes on services, may be turned into a complete department.

“We have to collect the tax this year, therefore there is need a complete department,” officials quoted the chief minister as saying.

According to a handout issued by CM House, since the Sindh Revenue Board has already been established, the provincial government will collect all taxes on items that come under Group-1 and Group-2, namely all services that can be taxed.

During the meeting, the composition of the Sindh Revenue Board and the appointment of staff also came under discussion.

The chief minister was briefed that according to the law passed by the Sindh Assembly on June 24, the Sindh government has to appoint four members for the revenue board, but only two have been inducted so far. Shah directed the chief secretary to look for the rest of the members and speed up the recruitment process.

The rate of the taxes was also discussed.

Since the promulgation of the 18th Amendment, all provinces have enhanced the sales tax from 16 to 17 per cent, but Sindh has yet to catch up.

Taxing services has been a controversial issue between the federal and provincial governments.

While the federal government insists on collecting the tax on different items and wants to pass the Reformed General Sales Tax Bill, the Sindh government is equally adamant that the provinces are autonomous after the 18th Amendment.

Published in The Express Tribune, January 30^th,  2011.