Constitutional dilemma: Sindh govt upset over sales tax collection by the centre

MPAs pass resolution calling federal govt to take back its decision to collect FED.

KARACHI:

The federal and Sindh governments may be heading towards a showdown as the provincial legislators criticised the centre’s move to impose and collect tax on services under the garb of federal excise duty (FED).

“After the 18th Amendment, sales tax on services has become a provincial subject,” said Pakistan Peoples Party (PPP) MPA Jam Khan Shoro while moving the resolution. “The Sindh government has been collecting the tax for the last two years and this move by the federal government to wrest back this authority is a direct interference in our affairs and is tantamount to depriving Sindh of its right.”

Shoro said that the Sindh government took the lead among the four provinces and developed a mechanism to collect the tax by constituting the Sindh Revenue Board, which has satisfactorily met its targets of Rs25 billion and Rs32 billion during the past two years. It has set a target of Rs42 billion for the next fiscal year, he said.

The resolution received support from either side of the aisle but Pakistan Muslim League-Nawaz (PML-N) MPA Irfanullah Marwat took an exception. The MPA’s move drew flake from PPP senior minister Nisar Khuhro who said that it was unfortunate that despite living in the province some people were opposing pro-Sindh policies. Marwat retorted that his opposition was not over the content of the resolution but over the fact that he was not given a copy.

Criticism over budget

In a scathing criticism of the budget, PML-Functional legislator Mehtab Akbar Rashdi came down hard on the government over its failure to utilise the development funds. “Of the Rs181 billion allocated for the annual development programme, the government could only spend Rs97 billion. This demonstrates the government’s lack of vision and the will to usher in development in the province,” she said, adding that Rs342 billion was spent on purchasing luxury vehicles, furniture and ACs for government offices.

Masoor Jatoi of PML-N called it a “stereotype” budget and said that the government has paid back the peoples trust by giving hunger, poverty, energy crisis and a complete breakdown of law and order.

He also said that the government had announced in 2009 that it would make Sindh free of hepatitis and yet Rs100 billion and five years later, there is little to show on that front.

Calling it a ‘wadera’ budget, Syed Hafeezuddin of Pakistan Tehreek-e-Insaf proposed a 400 per cent raise in tax on agriculture income and urgent land reforms. “Currently only 0.6 per cent tax is collected from land revenue,” he added.

Erum Azeem Faruqi of the MQM expressed her concerns over the decision to slash the human rights budget while PPP’s Hasnain Mirza was critical over nepotism and rampant corruption in some of the government departments such as irrigation and education.

Paying tribute

The assembly also adopted two different resolutions to pay tribute to slain PPP leader Benazir Bhutto on her 60th birth anniversary and the recently killed MQM MPA, Sajid Qureshi.

Law and order: Paramilitary force criticised

Under fire over the precarious law and order situation, the government was criticised by PML-F’s Mehtab Akbar Rashdi over giving one extension after the other every six months to the Rangers despite its dismal performance.

“The government should brief us over their performance and how many lives have they saved,” said Rashdi, adding that the police could have seen a real turnaround had the money been spent on them.

Published in The Express Tribune, June 25^th, 2013.