Cantonments’ collection of taxes hits Sindh revenue

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KARACHI: Enforcement of professional tax on businesses by cantonment boards in their jurisdiction has adversely affected the revenue of Sindh government, Excise and Taxation (E&T) Department sources said while talking to Dawn. Professional tax is charged from public and private limited companies, shops, professionals and the salaried class — both in the public and private sectors.

The cantonment boards also charge trade licence fee from shops — an example of double taxation.

The Sindh government collected Rs272 million in professional tax in 2015-16 compared to Rs323m in the previous year. The sources feel that the collection of professional tax by cantonment boards is not only tantamount to double taxation but is also hurting the civilian government’s revenue.

They, however, said that the Excise and Taxation Department has not withdrawn from its claim of charging professional tax and continues to send tax challans to the residents of cantonment boards.

A senior tax official said that due to double taxation, the department faced resistance from the taxpayers in Cantonment areas who were reluctant to pay same tax to two different administrations.

The matter has been brought to the notice of high ups in the Sindh government who have decided to talk to the concerned officials in the cantonment boards.

The E&T Department claims that the boards have assigned the collection of tax to contractors who adopt harsh tactics to extract tax from defaulters. The contractors not only charges tax at a high rate but also confiscate goods and goods carriers of the defaulting companies, E&T sources added.

Another levy which is hurting the Sindh government’s revenue from professional tax is the Trade License Fee charged by KMC from businesses and shops. The shopkeepers who pay trade license fee to KMC refuse to entertain professional tax challans dispatched by the excise and taxation department.

Director Taxes E&T Department Amir Jamil said the directorate has taken several measures to boost recovery from professional tax by bringing more companies and professionals under the tax net. At present, the number of professionals in the net is 2,80,618 and number of companies being 89,967.

One of the vital steps taken to boost the number of taxpayers is the launch of Self Assessment Scheme inviting new businesses and professionals to register them with the tax directorate.

Mr Jamil acceded the department does not advertise the scheme on the pattern of FBR which has huge funds for the purpose. He further admitted that there were no incentives for people responding to the self assessment scheme.

Published in Dawn, November 20th, 2016

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