Sindh plans increasing tax receipts to Rs200bn in three years

KARACHI: In order to engage the major stakeholders to increase provincial own-source revenue through a series of fiscal reforms, a ‘Taxation Forum’ was organized by Department of Finance, Government of Sindh in collaboration with Institute of Business Administration (IBA) Karachi and the World Bank, here Tuesday.

Presently, provincial tax receipts account for only 17% of total revenue receipts of the province. By these reforms, Government of Sindh intends to increase its tax receipts from the current Rs.91.37 billion to Rs.200 billion over the period of next three years.

In his inaugural address Syed Murad Ali Shah, Advisor to Chief Minister for Finance & Energy, Government of Sindh, emphasized the need of reducing reliance on federal fiscal transfers for implementing government policies. He said that in wake of the 18th constitutional amendments Government of Sindh undertook responsibility of colleting sales tax on services and even during the initial years the government collected the revenues more that provincial government used to receive from federal government. However, overall, there exist a significant gap between provincial revenue potential and its actual realization because tax system was not sufficiently upgraded and automated over time. He believed that provincial governments are better positioned to collect taxes efficiently.

The Chairman Sindh Revenue Board (SRB) shared the performance by showing an increase of 31.25 % in 2013-2014, against an increase of 28% for 2012-2013 and showed his organization’s ability to accept challenges. SRB plans to achieve a target of Rs.100 billion collection by 2017 by expanding its tax base from 6,000 to 10,000 and beyond. SRB has collected a record tax during the last four (4) years since Sales Tax on services has been devolved to the provincial government after the 18th constitutional amendments.

The Director General, Excise & Taxation told the moot that over the last 5 years their tax collection has increased from 10.58 to 27.01 billion. In result of proposed reforms, the department estimates to take its tax receipts up to Rs.55 billion.

In his presentation, Member Board of Revenue highlighted the role of computerization of land records which will help to identify land owners who can then be taxed. Secretary Finance, Government of Sindh, identified the various loopholes and areas for reforms in the tax collection process of Sindh and stressed on the need of better coordination between the tax collecting agencies by establishing Tax Reforms Unit. Director Enforcement, Sindh Public Procurement Regulatory Authority (SPPRA) said it is the taxpayers’ right to know how and where their taxes are being spent.

Senior Governance & Public Sector Management Specialist at World Bank reaffirmed their cooperation in such endeavours. He praised Sindh Revenue Board (SRB) for its performance in collection of tax. He believed SRB model to be emulated regionally, even globally.

Dr Qazi Masood, Director Centre for Business & Economic Research, IBA emphasized on the linkage between academia and the government through setting up of a consortium of reputed research institutions to provide research support to policymaking.

Dr. Musharraf Cyan, International Tax Expert Research International emphasized on filling the gaps by focusing on not only increasing tax base but also making it equity concerns.

Shabbar Zaidi, former Finance Minister highlighted various issues still need to be straightened out after the 18th constitutional amendment.

Participants included representatives from Finance Department, Government of Sindh, Institute of Business Administration, Karachi, the World Bank, Sindh Revenue Board, Board of Revenue Sindh, Excise & Taxation Department, JETRO, KPMG, USAID, Delloite, SPDC and AERC.

Leave a Reply