SRB collects Rs100b despite ‘impending shortfall’

Withdrawal of sales tax on cellular services added to SRB's challenges, it adds

KARACHI: The Sindh Revenue Board (SRB) managed to collect Rs100 billion in the fiscal year 2018-19, including Rs 7.13 billion for the Sindh Workers Welfare Fund and Sindh Companies Profits, despite an impending revenue collection shortfall, revealed SRB's annual report.

According to the report for 2018-19, presented to Sindh Chief Minister Syed Murad Ali Shah by SRB Chairperson Khalid Mahmood on Tuesday, the fiscal year has been "demanding." The report elaborates that increasing current account deficit, exchange rates and discount rates have slowed down the economic growth, in turn, increasing challenges for tax collecting bodies including SRB. The revenue board received another blow with the withdrawal of Sindh Sales Tax (SST) on pre-paid and post-paid cellular services following a Supreme Court order, it further states.

As per the report, the Sindh government took "a conscious decision" to maintain standard sales tax rate at 13%, the lowest in any tax domain in the country, despite a looming revenue collection shortfall. Having stated that, the report mentions, "Given the overall business confidence… SRB's performance has not been disheartening."

According to the report, ports and terminal operators, franchise services, banks, insurance companies, contract execution and construction sector remained major tax contributors during the fiscal year. However, a noticeable growth of 24% in the collection from eateries has been recorded, its adds.

Throughout the year, unregistered service providers continued to be SRB's main focus, as it took measures to strengthen the current operational arrangements and bring tax-evading service providers into the tax net, it has been shared in the report. Moreover, measures were taken to increase SRB's workforce and enhance the skills and understanding of those already employed. As many as 12 auditors were hired to improve audit operations and significantly reduce the chances of misreporting. In addition, 30 new Sindh sales tax officers were hired by SRB for increased efficiency.

The new hires were imparted trainings in different areas including those pertaining to law. Besides, multiple training sessions were organised in different cities of Sindh, particularly for enhancing the understanding of provisions under federal and provincial laws pertaining to withholding tax and conducting audits, some given by international experts from the World Bank.

After being presented the report, the CM remarked that 2019-20 would be no less challenging for SRB and it would take "unrelenting efforts" to achieve collection targets. Though, he appreciated SRB employees for their "industry in the face of difficult environment."

Published in The Express Tribune, January 29^th, 2020.