Finance Bill: Sindh expresses concern over sales tax clauses

KARACHI:  

The Sindh government has expressed serious concern over the Finance Bill proposal to change the provincial status of sales tax on services and collection of advance income tax from non-filers.

Sindh Finance Minister Murad Ali Shah in a statement issued on Saturday urged Finance Minister Ishaq Dar to intervene in the matter and drop the proposals of clauses 3(1)(iii) and 5(45) of the Finance Bill, 2016.

According to the bill, the Clause 3(1)(iii) proposes omission of the “provincial sales tax on services” as an input for the purpose of adjustment against federal sales tax on goods and, therefore, a significant departures from the long practiced value-added concept of sales tax regime.

Clause 5(45)  requires that Provincial Revenue Authority shall collect advance income tax from such income tax non-filers who are liable to pay provincial sales tax on services.

It also requires that the Provincial Revenue Authority shall not accept the mandatory provincial sales tax returns, unless advance income tax has been deposited.

Murad Ali Shah called upon the federation to respect the devolution made through the 18th Amendment. The Sindh government expects that the status-quo, in this regard, shall be maintained until this is deliberated in NFC or CCI meetings, he said.

Published in The Express Tribune, June 5^th, 2016.