By Abdul Qadir Qureshi
(Pakistan
The Sindh Government has issued strict directives that any new taxation should be enforced only if it does not affect the common man.
"In this regard Revenue Resource Mobilization has been embarked upon in strict compliance of the government directives,” Sindh Information Minister. Sharjeel Inam Memon, stated.
It was pointed out that Sales Tax is a pass on tax on sales of services provided and should not be confused with Income Tax which is tax on profits of the operation of a business.
As per Finance Bill 2013-14 passed by Sindh Assembly the relief measures taken by the Sindh Government encompasses non enhancement in ST rate which is to remain @ 16% despite Federation and other Provinces increasing it to 17 percent thus bringing a financial impact Rs. (-) 1.34 billion on the provincial budget; abolition of Bed Tax on hotels with an impact Rs. (-) Rs.140 million,
According to Finance Bill, the tax on Utility Bills (NADRA) is being abolished to remove the anomaly of taxing utility bill collection service by NADRA as other providers of this service are not taxed. This will result in an impact of Rs. (-) 10 million on provincial exchequer.
The Finance Bill indicates new sectors for ST services as proposed in the budget at 16% which includes tax on advertising agents.
According to the Information Minister this tax is introduced to remove an anomaly as advertising service is taxed but not the agents. By introducing this tax the advertising agents will be taxed which will remove the anomaly, help in taxing the service provider and increase the tax. It will result in a positive impact of Rs.3 million)
Beauty Parlours & Beauty Clinics, Gyms, Body Massage Centers, Pedicure & Manicure Centers are other areas having been included as service providers for the purpose ST Services with Hair cutting, Hair dyeing, Shaving, Plastic or Cosmetic Surgery, Therapeutic Massage and non-air-conditioned parlours and shops as being exceptions. This will bring another positive financial impact of Rs 30 milliojn.
Besides, ST services tax on Race Clubs will result in positive impact of Rs.20 million, Security Agencies Rs.100 million, Freight Forwarding Agents Rs.20 million), Commodity Brokers Rs.100 million, Marriage Halls & Lawns with the exception of Lawns under and upto 800 Sq. Yards (Rs.300 million), Public bonded warehouses Rs.100 million,
Event Management Services, Event Photography services, Pandal & Shamina services (Rs.300 Million), Tax on Services at Standard rate on Sponsorship Services, Business Support Services, Management Consultants, Software and IT based Development Consultants, Market Research Agency, Surveyors, Management Consultants, Auto Workshops having annual turnover of more than Rs.3.6 Million, Workshops of Industrial and Construction Machineries, Exhibition and Convention Services, Labour & Manpower Supply Services, Services provided in the matter of manufacturing or processing for others on toll basis bringing a positive impact of Rs.100 million, Internet Services with the exception for billing up to Rs.1500 per month, in order to provide relief to home users and students using the Internet resulting in a positive impact of Rs.300 million.
As per Finance Bill the rate of Infrastructure has been changed to 0.90% to 0.95% from 0 .80% to 0.85% which was adjusted in 2008. It will result in a positive impact of Rs. 2 Billion
As on Property Tax, the Annual Rental Value (ARV) rate has been changed to 25% from 20% which was last revised in 2001 and will result in a positive impact of Rs. 370 million.
The Trade and Import of Potable Liquor License Fee is increased from Rs 6 to Rs 8 lacs and Retail Off Liquor License fee changed from Rs 3.5 lac to Rs. 5 lacs. The last revision in this license fee was carried out in 2008. This was result in a positive impact of Rs 23.3 million.
The Information Minister said it is the endeavor of our government to make, Sindh financially independent and increase its revenues by taking advantage of the devolution of power in the 7th NFC Award.
"At the same time we do not want to burden our people and businesses to suffer from negative impact of taxation. We have therefore decided to tax the following services at a lower rate of 4% after listening to the representations of the stakeholders".
The government agreed that in order not to burden constructors and construction industry which is provides stimulus for economic growth the tax rate will be at a reduced rate of 4% with no input adjustment. It will result in a positive impact of Rs.300 million.
Based on the policy increasing the tax net and to incorporate sales tax upon the recommendation of consultants it has been decided that Legal Practitioners and Consultants, Accountants and Auditors and Tax Consultants will be taxed at reduced rate of 4% with no input adjustments. It has to be understood that this tax is a pass on tax for people and businesses using the services provider. Impact (+) Rs.900 million
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