The Sindh Board of Revenue, during the last three years (2020–21 to 2022–23), was given a revenue recovery target of Rs100,640 million against which it could recover Rs48526 million, showing a shortfall of Rs52,114 million. Therefore, the CM directed it to propose the revival of abolished taxes and improve the e-stamping regime so that recoveries could be improved.
This was disclosed in a meeting held under the chairmanship of Sindh Chief Minister Syed Murad Ali Shah here at the CM House.
The meeting was attended by Chief Secretary Asif Hyder Shah, PSCM Agha Wasif, SMBR Baqaullah Unar, Secretary Finance Fayaz Jatoi, Member Board of Revenue Abbas Baloch, Special Secretary Finance Nisar Memon, and others. At the outset, Secretary Finance Fayaz Jatoi told the CM that during the last three financial years, 2020–21 to 2022–23, the Board of Revenue (BOR) collected Rs 48526 million against a target of Rs 100,640 million, showing a shortfall of Rs 52114 million. The CM said, “BOR has to bring efficiency to its revenue collection.”
“The SMBR must recommend reforms where necessary; otherwise, it should take concrete measures to improve its performance,” he said, adding that he was not satisfied with its recoveries.
SMBR Baqaullah Unar said, “BOR collects five taxes.”
He added, “During the current financial year, the BOR has a target of Rs 55,218 million. The nine-month target comes to Rs 41,414 million, against which it has recovered 33.57 percent, or Rs 13,901 million.”
The CM was told that the water rate recovery target was Rs 805.309 million, against which Rs 74.540 million, or 9.2 percent, were recovered in 2022–23.
To a question, the CM was told that out of 6,090 dehs in the province, the collection of 2,173 dehs was made by the Sindh Irrigation Drainage Authority (SIDA).
The collection of Rs74.540 million has been made from 3,917 dehs assigned to the Revenue Department. The Agriculture Income Tax (AIT) nine-month target is Rs2,723 million, against which the BOR collection is 44.82 percent, or Rs1,220 million. The collection of registrations is 24.60 percent, or Rs 244 million, against a target of Rs 990 million.
Similarly, the stamp duty target was Rs 36,787 million, but its collection was 33.24 percent, or Rs 12,229 million.
The CM pointed out that the threshold for AIT exemption is 1.2 million, which is very high and may be brought to par with the FBR threshold of 0.4 million.
He said that the bar on assessment of AIT beyond the preceding two assessment years may be modified to six years. Mr. Shah said that the manual crop inspection, assessment, and collection procedures need to be digitized.
In response to a question regarding the shortfall in stamp duty, the CM was told that the overall economic situation of the country has affected the transactions of immovable properties.
The adverse impact of FBR taxes on immovable property, such as 3 percent on the filer and 10.5 percent on the non-filer purchaser, three percent on the filer and six percent on the non-filer seller, and the imposition of deemed rent on immovable property at the rate of 1 per cent. The National Bank has 142 branches issuing e-stamps, and Sindh Bank has so far added 100 branches.
An agreement with the Bank of Punjab has been executed for the issuance of e-stamps, for which approval from SBP is awaited. The chief minister directed Chief Secretary Asif Hyder Shah to convene a meeting of BOR and review its tax collection mechanism, find out its shortcomings, and suggest necessary improvements.
“The BOR is an important tax-collection organization of his government, and it has performed well in terms of tax collection and delivery of service,” he said. He directed the Chief Secretary to get a detailed briefing from the BOR on the shortage of its inspection and IT staff in the stamp wing and about the facilities for the inspecting staff and address their issues.
The CM directed SMBR to submit a revision of the old tax rates and a revival of abolished taxes for discussion and approval. It may be recalled that the registration fee for the transfer of immovable property was abolished in 2020.
The registration fee pertains to the documents: digital scanning fee, power of attorney, mortgage deed, partnership deed, etc. The capital value tax (CVT) was also abolished in September 2020, and land revenue was abolished in May 2000. The land revenue collection consists of various fees, such as a fare fee, a mutation fee, etc.