KARACHI: The Sindh Revenue Board (SRB) will meet its sales tax collection target of Rs42 billion for the outgoing fiscal year, showing an increase of 25 percent against the last year’s collection of Rs33.6 billion.
As per details, experts see the increase in tax collection through SRB as a welcome sign, but they are of the view that the Sindh has the potential of generating up to Rs100 billion.
With rising revenues, they stressed, the Sindh government should also realise that its responsibility to spend this money properly and diligently is also increasing.
MD Emerging Economics Research Muzammil Aslam said, “It is good to see Sindh is increasing its revenue collection by 25 percent but it is still very small when you see the total size of the provincial budget.”
Sindh government has set the tax collection target at Rs49 billion for the next fiscal year, which is too little compared to the total budget size of Rs686 billion for fiscal 2015. This means that the provincial government is highly dependent upon the federal government or other sources of income.
While presenting the budget 2015, Sindh Chief Minister Qaim Ali Shah announced that the province is proposing to reduce the sales tax rate on services from the current 16 percent to 15 percent.
He said that the reduction in sales tax rate would provide substantial relief to the taxpayers and citizens and would enhance compliance.
The Sindh government has proposed to introduced 5% concessionary sales tax on services on three new sectors namely education, health services and road transport services.
Shah said that the provincial government is introducing these taxes, as these particular sectors were not paying sales tax on services.
Experts welcomed the levy of sales tax on these three sectors especially at the concessionary rate of 5%.
