PA passes tweaks to Finance Bill

KARACHI:

The Sindh Assembly on Friday approved the amendments to the Sindh Finance Bill for the fiscal year 2024-25. Effective from July 1, 2024, the revised bill introduces new taxes and increases existing rates in a bid to boost revenue and broaden the tax base.

Under the amended Finance Bill, sweeping changes have been made to various taxes and duties across the province.

Stamp Duty under Article 1 and 2 has been revised, imposing a duty of up to Rs2,000 on income from immovable property. A duty of Rs1,000 has been levied on contracts of sale for vehicles and properties, while agreements between builders and flat/shop allottees will attract a duty of Rs5,000. Travel taxes now include Rs50 on domestic air travel and Rs400 per ticket for international travel.

Certain exemptions apply, such as no duty on allotment orders for flood-affected houses and Gothabad. Additional duties apply to leases, transfers, real estate transactions, and letters of credit, ranging from Rs1,000 to Rs3,000. Partnerships will incur a duty of Rs5,000 upon formation or termination, while duties on insurance and powers of attorney range from Rs1,000 to Rs7,000.

Moreover, amendments to the Sindh Motor Vehicle Ordinance introduce taxes of Rs450,000 on imported vehicles of 3,000cc and Rs275,000 on 2000 cc vehicles. Locally manufactured vehicles face taxes of Rs50,000 (2,000 cc) and Rs25,000 (1,500 cc).

Sales tax adjustments include expansions to sectors like telemarketing, automobile and motorcycle shops, private educational institutions, hospitals, consultant clinics, resorts, guest houses, and more. The sales tax rate has been raised from 13% to 15%.

Penalties for non-compliance include fines of Rs1 million for non e-invoicing and Rs100,000 with potential imprisonment for e-invoicing refusal. Failure to submit Sindh Sales Tax on services may lead to a Rs100,000 penalty.

The Sindh government also increased the infrastructure cess and imposed taxes on partnership formations/terminations and insurance renewals. A tax of Rs500 is now applicable to sea vessel insurance.