KARACHI: Sindh’s Excise and Taxation department, which collects seven taxes constituting 60 per cent of the province’s total revenue, amassed around Rs35 billion in 2014-15.

It was eight per cent higher than preceding year’s collection of Rs32.768bn and 97pc of the target of Rs36bn set for FY15.

The latest data shows that the highest rise, 11pc, was recorded in revenue from infrastructure cess which jumped to Rs24.54bn from Rs22.402bn.

Tax recovery from motor vehicle registration, which was marred by high rate of withholding tax, improved by 5pc to Rs4.162bn from Rs3.858bn a year earlier.

Revenue from professional tax grew by 8pc to Rs327.5 million from Rs303.5m. It was an unsatisfactory figure in view of an untapped large tax net and low rate of tax for the private and public limited companies with huge paid-up capital. However, a survey with help from the World Bank is in the offing to expand the professional tax net to its logical size.

Property tax collection was almost unchanged at Rs1.82bn, which shows that no serious effort was made in this regard. The collection mechanism here was a mix of automation and manual tax procedures as far as issuance of tax challans to the owners of property units in Karachi is concerned. The hopes are now pinned on a survey planned for this financial year.

Revenue from cotton fee increased 4pc to Rs159.7m from Rs153.7m. The entertainment duty fetched Rs48m compared to Rs45m last year.

The department also received bank guarantees worth Rs3.135bn deposited in the court by importers against infrastructure cess in cases under litigation. Adding this amount, the total revenue surpasses the target fixed by the finance department.

The revenue performance of the department was also affected by the change of office at the secretary level. By the time the incumbent learnt about the taxation system he was removed on charges of misconduct.

Describing the revenue performance as good despite all odds, Director General Excise and Taxation Shoaib Siddiqui said the collection could have been higher if the administrative and technical problems had been overcome.

“The provincial tax system has been fully computerised, eliminating the corrupt elements and revenue leakage to a great extent,” he said. “What is needed now is a comprehensive survey of property units and businesses to cover all segments of society having taxable income.”

Published in Dawn, July 5th, 2015

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