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Murad defends imposition of new taxes in Sindh budget

Updated June 16, 2019

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SINDH Chief Minister Murad Ali Shah addresses the post-budget press conference on Saturday.—PPI
SINDH Chief Minister Murad Ali Shah addresses the post-budget press conference on Saturday.—PPI

KARACHI: Sindh Chief Minister Syed Murad Ali Shah defended on Saturday his decision to burden people of the province with more taxes in the budget for fiscal year 2019-20, saying it was because of the “incompetence of the federal government”.

“Yes, we have increased taxes in revenue and excise departments in certain areas as the disastrous policies of the federal government have forced us to go for it,” he told a post-budget press conference at the auditorium of the Sindh Assembly building.

“Despite this increase taxes in Sindh are lesser than what governments in other provinces have levied,” he claimed. “We have been forced to take such a step because of the incompetence and disastrous financial policies of the federal government.”

Fixed yearly taxes on professionals, offices, fuel stations proposed; online cabs, e-commerce entities also brought under tax net

“We have [imposed] tax on luxury cars of 2,000cc or more for about 1.5 per cent and so the heavy motorbikes of 150cc or more come in the net accordingly.

Slams opposition in PA

Mr Shah condemned the opposition in the Sindh Assembly saying the attitude of opposition lawmakers was “intolerable”.

“This opposition, in fact, does not want to take part in the debate and approval of the budget. Still, we will give them full opportunity to express their opinion,” he said.

He said no opposition lawmakers in the past had called names and it was the “undesirable first” where opposition members had abused him by mocking his name.

He said Sindh spent Rs137bn till April 30, 2018 while Punjab spent Rs389bn; this fiscal by the same time, Sindh spent Rs80.5bn while Punjab spent a meagre Rs126.4bn. “Both provinces spent less than the actual development budget, yet our ratio was still double than Punjab’s.”

He said the current fiscal had been the most difficult financial year where Sindh’s budget had to be moved downward and “we are forced to spend Rs100bn less than the development budget”.

He said that the federal government had now intimated the Sindh government that it would receive Rs835bn for the next fiscal year and “keeping in view this figure, we have formulated our budget”.

“We have offered a balanced budget. This is neither a surplus nor a deficit budget,” he added.

Centre allocates no money for Sindh’s three hospitals

CM Shah said despite the federal government’s notification that it was taking over three large hospitals of Karachi, the Centre had not kept a single penny for them in its budget. “But, we have made heavy allocations in this budget and we’ll run them in future, Insha Allah.”

He said the federal government had allocated just Rs12bn for Karachi against its promise of Rs45bn, while Sindh government would spend Rs52bn on projects, which included Rs16bn worth foreign-funded projects.

He said education had been prioritised on top in the next fiscal’s budget with an increase of 18pc; followed by health with 19pc. Special education’s allocation had been increased by 76pc and law and parliamentary affair’s by 58pc. Budget for law and order has been increased by 9pc.

The chief minister said Sindh had been given a meagre 3.5pc in the federal government’s public sector development programme worth Rs951bn.

He said Rs228bn had been kept for development next fiscal as 78pc of funds would be spent on ongoing schemes and the remaining 22pc on new schemes.

Sindh budget carries many new taxes

According to the finance bill, which was presented in the Sindh Assembly a day before, a Rs500 per annum tax is proposed to be imposed on “all persons engaged in any profession, trade calling or employment, hereinafter and assessed to in the preceding financial year”.

It also proposes a Rs1,000 per annum tax on all factories, shops, or establishments, including video shops, real estate, shops or agencies and car dealers not assessed to income tax in the preceding financial year.

The government also imposed a yearly tax of Rs5,000 on all petrol pumps and CNG stations.

Tax at the rate of 1.5pc of value in the valuation table has been imposed for all categories of immovable properties excluding those of 240 square yards or less.

An amount of Rs75 per sq-yds would be charged where the value of immovable property is not recorded.

Similarly, 1.5pc of value in the valuation table would be charged on flats from 1,000sq-ft or above.

Online vehicle services like taxi, cab, car, van, motorcycle and rickshaw, indoor sports and game centres, online marketing places or information technology platform run by e-commerce entities or organisations over an electronic network, vehicle parking and valet services, renting of machinery, equipment, appliances and other tangible goods have also been brought into the net of sales tax on services.

Besides, waste collection, transportation, processing and management services, meaning services provided in the matters of collection, processing, transportation, disposal, recycling and management of all kinds of wastes, waste materials and garbage and included road and street cleaning services, whether manually, mechanically or otherwise, have been made part of the sales tax net.

Published in Dawn, June 16th, 2019