KARACHI: The Karachi Tax Bar Association (KTBA) has urged the Sindh Revenue Board (SRB) to exempt the exports of all kinds of services from sales tax.

Acknowledging that the provinces have the right to tax all services, the KTBA said the SRB should exempt services exports from sales tax in line with the Punjab Revenue Authority (PRA) and the Federal Board of Revenue (FBR).

KTBA office-bearers demanded the exemption at a seminar on Sindh Finance Act 2017 on Thursday.

The SRB is currently collecting three per cent sales tax on the exports of all categories of services, except those relating to information technology and chartered accountancy that are exempted.

In the budget for 2017-18, the SRB also imposed sales tax on services by call centres. The SRB is already collecting a 3pc tax from the providers of indenting services.

KTBA President Abdul Aziz Tayabani said tax laws in Sindh overlap and contain ambiguities. He added that the provinces have varying definitions for different terms, which creates problems for taxpayers and tax practitioners. A major issue is the difference in tax rates being charged by the province, he added.

Mr Tayabani pointed out that provincial laws allow reverse charge, which is like double taxation and against the constitution. “Many people work abroad. Therefore, they should not be taxed,” he said.

He demanded the appellate forum should be independent of provincial autho­rities. He said the SRB routinely issues notices be­­yond its jurisdiction, although the constitution clearly defines the domains of the federation and provinces.

Keynote speaker Adnan Mufti said the rate of sales tax on travel agents and tour operators, renting immoveable property services, in­­den­ting services and call centres has been reduced, which is a positive development.

Published in Dawn, September 8th, 2017