KARACHI: With the aim to address grievances of the provinces, the Sindh government has asked the Centre to transfer the share of sales tax collection on goods comes, under the National Finance Commission (NFC), to the provinces.
In this regard, Sindh Finance Department convened a high level meeting at the Sindh Finance Department Monday. The meeting was chaired by Senator Saleem Mandviwalla, Member NFC Sindh, Finance Minister of Sindh Murrad Ali Shah, Finance Minister KPK Syed Muzaffar Hussain Shajra, KPK Member to NFC Professor Mohammad Ibrahim, Balochistan’s Member NFC Qaisor Bengali, and chairman Punjab and Sindh Revenue Authorities.
The meeting was told that Sindh had prepared a draft on the assignment of tasks and despatched it to the federal and provincial governments for feedback.
Senator SaleemMandviwalla presented the report of 2nd working group and said that the group has prepared its report on evaluation of federal and provincial tax collection system, looked into the best international practices and benchmarking and studied the pros and cons of integrated vs. devolved tax collection mechanism.
The report highlighted issues related to collection of general sales tax on goods by the provinces instead of the federal government, and sales tax on services being collected by the federal government by declaring them as goods.
The draft also decried “the Federal Board of Revenue’s encroachment upon provincial taxes, including withholding taxes on banking transactions, telecommunication services, etc.”
The report recommended that the provinces be allowed to collect sales tax on goods, adding that the federal government could distribute the amount as per the spirit of the NFC award after the provinces forward the sum to the centre.
