CM Murad claims Sindh will meet its tax collection targets by June 30

Ten month estimates of federal transfers are around Rs504.4b, but only Rs380b have been transferred, says finance dept

KARACHI: The withdrawal of Sindh Sales Tax (SST) on pre-paid and post-paid cellular services by the Supreme Court caused a loss of Rs10 billion to the provincial government, claimed Sindh Revenue Board (SRB) Chairperson Khalid Mahmood. He was speaking at a meeting with the Sindh Chief Minister Murad Ali Shah on Monday at the CM's House.

According to Mahmood, Rs10 billion is the loss calculated so far. He said that due to depressing economic conditions during the current financial year, the reduction in corporate and government advertisements has also caused a loss of Rs3b to the provincial government.

Shah said that he was aware of the financial conditions in the country therefore knew that the SRB would be facing difficulties in achieving its targets.

The CM added that he was satisfied with the SRB's performance.

He reviewed the collection of SRB, besides the performance of the excise and taxation department, the board of revenue, energy department and the mines and minerals department. All departments have almost achieved their targets and would be meeting them by the end of the fiscal year, the meeting concluded.

Annual report

Referring to the SRB's annual report, the CM said that during 2018-19, no new taxes were imposed or increased just to provide space to businesses in tight economic conditions. He added that the target of Rs120b set for the year 2018-19 was a daunting task but the SRB would achieve its target.



The report stated that the fiscal year 2017-18 had been significant in several aspects. SRB met the target of Rs100b, posting an increase of 27% year-on-year. This includes the collection Rs8b for Sindh Workers Welfare Fund (WWF) and Sindh Companies Profits (workers participation) Fund that SRB has been mandated to collect for the province.

Mahmood stated in the report that the standard rate of sales tax has been maintained at 13% during the year which is the lowest in any tax domain in the country, whether federal or provincial.

The collection effort has met challenges from the slow economic recovery which was exacerbated by the impact of political transition in the last quarter of the year.

According to the annual report, telecommunication ports and operators, banks, insurance executions and franchise services remained major contributors. Top ten sectors contributed 57% of the total collection as compared to 63% last year. Consistent effort is needed to tap the services hitherto escaping enforcement, maintained the report. It stated that the renewed emphasis by national and subnational tax domains on documented transactions is likely to ameliorate the task.

Sindh's financial position

The chief minister also presided over another meeting to assess the financial position of the provincial government.

According to the finance department, as per budget estimates, the federal government has to transfer Rs605.3b in the current fiscal year.  Ten month estimates are around Rs504.4b but only Rs380b have been transferred to the Sindh government, maintained the finance department.

Shah decided to curtail non-development expenditures and axed releases to slow-moving development schemes so that the schemes on-going at a faster pace could be completed. He also directed the finance department to release budget for essential services.

Published in The Express Tribune, May 14^th, 2019.