KARACHI: The Sindh Board of Revenue (BoR) raised over Rs5.3 billion in stamp duty during the first nine months of this fiscal year compared to Rs4.7bn collection it made in the corresponding period last year.

The July-March collection is 56 per cent of the Rs9.5bn target set for 2016-17.

The stamp duty collection dipped during July and August due to double valuation charts introduced by the Federal Board of Revenue (FBR) to charge withholding tax on registration of property sale deeds creating a widespread confusion.

The board could collect Rs350m in July and Rs526m in August compared to Rs530m and Rs568m in the respective month last year.

The collection, however, started showing improvement from September. It reached Rs892m in March, Rs832m in December, Rs556m in February and Rs551m in October.

Deputy Inspector General of Stamps Mohammad Aslam said banking documents, contracts and purchase orders, lease agreements etc contributed 60pc to the overall stamp duty revenue.

Earlier the bulk revenue came from registration of property sale deeds, but its share started declining due to abnormal taxation by the FBR on sale and purchase of property units.

The BoR last year increased stamp duty rates by 100pc on banking documents including bill of exchange and 50pc on contracts, purchase orders and lease agreements. Rates on shipping documents such as bill of lading and bill of entry were also raised by 100pc.

It also raised rates of properties listed in the valuation table meant for calculating stamp duty by 20pc across the board.

Meanwhile, Inspector General of Registration of the BoR, Ali Ahmed Baloch, disclosed that the registration of property sale deeds has been suspended after the Sindh High Court interim order, which made the completion certificate from the Sindh Building Control Authority (SCBA) a mandatory for the registration of sale deeds.

He admitted that the suspension would have 40 to 45pc impact on revenue generation under this head.

The BoR has also stopped registration of sale deeds of open plots which apparently do not require any completion certificate from the SBCA.

He said the BoR was awaiting a clear-cut guidance from the court for registration of sale deeds.

The BoR has proposed certain measures for the next budget to boost stamp duty revenue. It has suggested to further increase rates of property units listed in the valuation table, which has been raised by only 20pc since 2010, whereas the prices of property in open market have increased by more than 100pc.

It has also suggested to upgrade localities in major interior towns by introducing category A-1 with rates 50pc higher than units falling in existing category A.

Published in Dawn, April 16th, 2017