Revenue collection: Sindh’s interim finance minister sets his targets high
Says he can increase provincial revenues by 400% in two years.
“I am not going to confirm or deny the rumours of a change in my portfolio. As a professional, however, I would like to work on the collection of revenue rather than spending it," says Zaidi.
KARACHI:
Sindh’s newly-inducted caretaker finance minister, Syed Shabbar Zaidi, may have been a lifelong private-sector professional with decades of experience in consulting and auditing, but he is certainly no outsider when it comes to running government affairs.
Trained as a chartered accountant and currently on leave from AF Ferguson and Company – an auditing firm where he serves as partner – Zaidi has held several advisory positions in government bodies in the past. However, his current position in the interim provincial government is likely to be one of the most daunting tasks the former president of the Institute of Chartered Accountants of Pakistan (ICAP) has ever undertaken.
He remains positive, however. “Revenue generation from Sindh can be increased up to 400% in just two years,” Zaidi told The Express Tribune during an interview on Tuesday. “We can take revenue collection in Sindh to Rs400 billion in a couple of years for sure,” he added.
For the fiscal year 2012-13, the budgeted estimate set by the last Sindh government for provincial revenue generation was only Rs96.6 billion. For the preceding fiscal year, the budget estimate for revenue collection was Rs82.5 billion – which suggests that the Sindh government expected a year-on-year rise of roughly 17% in provincial tax receipts, sales tax on services and non-tax receipts.
So, doesn’t a 400% hike in provincial revenue collection in merely two years seem like exaggeration on Zaidi’s part?
“The first step towards achieving the goal is the proper implementation of agricultural taxes. That should be followed by proper implementation of the urban immovable property tax, the motor vehicle tax, and stamp duty registration,” Zaidi responded in the no-nonsense tone of a seasoned accountant.
He added that the realigning of professional tax and consolidation of the revenue department of the Sindh government are the other key steps he considers necessary if he is to rapidly increase tax collection in the province. Currently, three separate bodies – the Board of Revenue, Excise and Taxation Department, and the Sindh Revenue Board – collect taxes in the province.
“Moreover, procedural devolution of the collection of sales tax on goods from retailers to local bodies is also very important,” he adds.
As a veteran of the private sector, one thing Zaidi feels most passionately about is transparency in the government. He says the first thing he did after taking charge as provincial minister of finance was to seek help from the World Bank to help the Sindh government implement the Access to Information Act. “I will try my best to get it done before my brief term in office is over,” he says. Moreover, he has passed orders to activate the website of the Ministry of Finance so that people do not have to run from pillar to post just to keep track of their files in the Sindh bureaucracy.
Although Zaidi refused to make any comment on the issue, sources say his portfolio is about to change from finance to excise and taxation. “I am not going to confirm or deny the rumours of a change in my portfolio. As a professional, however, I would like to work on the collection of revenue rather than spending it. My expertise is revenue generation, rather than expenditure allocation,” Zaidi said.
Published in The Express Tribune, April 17th, 2013.
Like Business on Facebook to stay informed and join in the conversation.
Sindh’s newly-inducted caretaker finance minister, Syed Shabbar Zaidi, may have been a lifelong private-sector professional with decades of experience in consulting and auditing, but he is certainly no outsider when it comes to running government affairs.
Trained as a chartered accountant and currently on leave from AF Ferguson and Company – an auditing firm where he serves as partner – Zaidi has held several advisory positions in government bodies in the past. However, his current position in the interim provincial government is likely to be one of the most daunting tasks the former president of the Institute of Chartered Accountants of Pakistan (ICAP) has ever undertaken.
He remains positive, however. “Revenue generation from Sindh can be increased up to 400% in just two years,” Zaidi told The Express Tribune during an interview on Tuesday. “We can take revenue collection in Sindh to Rs400 billion in a couple of years for sure,” he added.
For the fiscal year 2012-13, the budgeted estimate set by the last Sindh government for provincial revenue generation was only Rs96.6 billion. For the preceding fiscal year, the budget estimate for revenue collection was Rs82.5 billion – which suggests that the Sindh government expected a year-on-year rise of roughly 17% in provincial tax receipts, sales tax on services and non-tax receipts.
So, doesn’t a 400% hike in provincial revenue collection in merely two years seem like exaggeration on Zaidi’s part?
“The first step towards achieving the goal is the proper implementation of agricultural taxes. That should be followed by proper implementation of the urban immovable property tax, the motor vehicle tax, and stamp duty registration,” Zaidi responded in the no-nonsense tone of a seasoned accountant.
He added that the realigning of professional tax and consolidation of the revenue department of the Sindh government are the other key steps he considers necessary if he is to rapidly increase tax collection in the province. Currently, three separate bodies – the Board of Revenue, Excise and Taxation Department, and the Sindh Revenue Board – collect taxes in the province.
“Moreover, procedural devolution of the collection of sales tax on goods from retailers to local bodies is also very important,” he adds.
As a veteran of the private sector, one thing Zaidi feels most passionately about is transparency in the government. He says the first thing he did after taking charge as provincial minister of finance was to seek help from the World Bank to help the Sindh government implement the Access to Information Act. “I will try my best to get it done before my brief term in office is over,” he says. Moreover, he has passed orders to activate the website of the Ministry of Finance so that people do not have to run from pillar to post just to keep track of their files in the Sindh bureaucracy.
Although Zaidi refused to make any comment on the issue, sources say his portfolio is about to change from finance to excise and taxation. “I am not going to confirm or deny the rumours of a change in my portfolio. As a professional, however, I would like to work on the collection of revenue rather than spending it. My expertise is revenue generation, rather than expenditure allocation,” Zaidi said.
Published in The Express Tribune, April 17th, 2013.
Like Business on Facebook to stay informed and join in the conversation.