KARACHI, Dec 2: After showing an impressive improvement of 40 per cent in the collection of provincial taxes during first four months of this fiscal, the Sindh government has decided to take on the mighty business groups to further push up the revenue collection in selected eight taxes to over Rs8.5 billion by next June.

Notices have been issued to about 70 gold importers under Sindh Tax Evasion Punishment Act 1974 for refusing to pay Rs340 million infrastructure fees of 0.5 per cent since last ten years, records are being sought from five star and other big hotels of their occupancy and room rent being charged by them, and data and information has been obtained from the Central Board of Revenue of about seven lakh income tax assesses to explore real potential of professional tax collection in the province.

"In last four months, from July to November this year, the Excise and Taxation department has mopped up a total of Rs2.8 billion as against Rs2.02 billion in 03-04," S.M. Jaleel, Advisor on Excise and Taxation informed Dawn on Thursday.

The cash recovery of tax during this period stands at Rs2.57 billion, which is 27 per cent more than the actual amount of tax recovered in same period of last fiscal. The remaining amount of Rs230 million pertains to bank guarantee and the money deposited in the courts in disputes involving litigation.

In six major provincial taxes, the motor vehicle tax, excise, infrastructure levy, cotton fee, professional tax and hotel tax, the total collection has exceeded Rs2 billion in last four months and is well ahead of the proportionate projections and much higher than Rs1.7 billion collected in same period last fiscal year.

A big rise is expected from the infrastructure levy of 0.5 per cent on all imports except for oil and government sponsored imports. Import bill is expected to touch a record figure of $17 billion this year which when translated into rupee at an average value of Rs60 a dollar comes to more than Rs1.1 trillion.

Even if Rs250 billion is accounted for oil and government imports, the Sindh government hopes to recover 0.5 per cent cess from over Rs800 billion, which comes to roughly Rs4 billion.

"There are over 200 court petitions against infrastructure levy," Jalil said and informed that Sindh has won the case at one level of the high court and is now involved in an appeal case before a bigger bench of the court. Petitioners include multinationals, Pakistani companies and individual businessmen.

Gold importers are defying the payment of infrastructure fees since the time it was levied. Of 70 such importers, four are big sharks with tremendous clout and influence who are arrogant.

Notices have now been issued to them under the Sindh Tax Evasion Punishment Act, which stipulates six months imprisonment. "Our intention is to recover Rs340m tax from them," the Advisor said.

Jalil claimed that infrastructure cess collection amounts to over Rs1 billion in last four months and is 311 per cent more than what was recovered in same period of 03-04. Motor vehicle tax recovery is 55 per cent high, excise is over 70 per cent and cotton fee is 16.50 per cent.

Improvement in hotel tax and professional tax is small but investigations and efforts are on to fully harness the potential of these two levies of the provincial tax. The Sindh government has obtained from the Central Board of Revenue the data and information of the seven lakh assesses of the income tax in the province.

The number of professional tax payers is very small in the province. The CBR information is helping the Sindh Excise and Taxation hounds to trace al those who file their return with the income tax authorities but are still un-assessed with the professional tax authorities.

Help is also being sought from Pakistan Medical Association, Bar Councils, and bodies and organizations of builders, developers, architects, engineers and other professionals to bring all those within the net of professional tax who are so far outside from this levy.

Collection of professional tax in the province during last fiscal year was Rs175 million as against Rs155 million in 02-03. The projection for the current fiscal year is Rs200 million. But there is an expectation to collect at least Rs300 million professional tax during current fiscal year which will continue to go up as the un assessed professionals are brought within tax net.

Yet another investigation and consultation exercise is going on with the management. Managements of five star and other big hotels have been circumventing the provincial rules of excise and taxation. They were found to be collecting provincial tax and excise but instead of returning it to the government were retaining the amount with themselves.

Excise and taxation hounds are now after the management's of these hotels demanding full disclosure of the accounts. "They have been charging Rs6,000 and Rs7,000 rent for a room and showing only Rs900 in their records," an official of the department said. "Once the collection starts showing improvement, there can be a possibility of considering a review of tax rates," Jalil remarked.