January 07, 2009	Wednesday	Muharram 09, 1430

KARACHI, Jan 6: Sindh Chief Minister Syed Qaim Ali Shah will soon approach the president and the prime minister with a summary to seek the restoration of the general sales tax on utilities to the province from the federal government, said the Sindh information minister on Tuesday.

Shazia Marri was briefing media persons after the third meeting of the house committee set up by the government to formulate Sindh’s strategy and stand on the National Finance Commission.

She said the meeting, presided over by the chief minister, was attended by all members of the committee headed by Local Government Minister Agha Siraj Durrani, ministers Syed Murad Ali Shah, Syed Sardar Ahmad, Shazia Marri, and economists Dr Kaiser Bengali, Nawaz Ali Leghari and Taj Haider.

Referring to the GST on services, which was withdrawn from the provinces through an ordinance by former president Pervez Musharraf in 2000, Ms Marri said even the utility tax was taken from the provinces without any constitutional cover. As such, it was outside the purview of the NFC award and if restored to the provinces according to the provision of the 1973 Constitution, it would provide sufficient financial power to Sindh to achieve its development targets.

In reply to a question, she said that according to 2005-06 figures, the total revenue generation on that count was Rs53.5 billion, but provinces remained deprived of it.

Ms Marri said this tax was charged on the electricity, gas and telecommunication sectors and was shown in the constitution as a provincial subject.

In today’s meeting, the horizontal formula of the NFC Award 1996 was discussed which was given on a population basis by the caretaker government a few days before the elected government took over.

She said the NFC award became due after every five years, but instead of compliance with the provision of the constitution, retired Gen Pervez Musharraf imposed it through an amendment to the constitution.

The minister said as there was no democracy in the country after the late Zulfikar Ali Bhutto, the NFC was not formed and it was now the PPP government which had set up a commission to work out a formula in accordance with the aspirations of the people and now all provinces, particularly Sindh, were awaiting its award.

Ms Marri pointed out that in the PPP election manifesto, given by its chairperson the late Benazir Bhutto, the NFC award was based on a multi-criteria formula including population, backwardness of an area and revenue generation, and the same formula was part of the manifestoes of coalition partners, the Muttahida Qaumi Movement and the Awami National Party.

She said that the house committee was considering the quantum of percentage keeping in view such awards of other countries.

The minister said although Sindh generated 70 per cent of the national revenue, this aspect was never appreciated by the autocratic governments.

In reply to a question, she said the committee had also taken notice of violation of commitments made when the octroi tax had been abolished and hence 2.5 per cent in the share of GST collection was to be given to the provinces, which comes to 46 per cent, but instead Sindh was being given only 34.8 per cent. “Our demand was to increase the province’s share to 46 per cent,” she said.

Answering another question, she said the terms of reference of the NFC award were yet to be revised as the present ToR pertained to 2005.

The minister said all efforts of the government were to win back the trust of the provinces, which was vitiated by the absence of democratic governments for 45 years in the history of the country.

But now, she added, all governments were working with the spirit of harmony and understanding as federating units and the efforts would bear fruit soon.

Asked if the NFC award would be announced before the new budget, the minister said that although the Prime Minister’s Adviser on Finance, Shaukat Tarin, had said it would be announced before the budget, the issue was not of award but of distrust which was a result of injustices.