Sindh may stop collecting withholding tax for FBR: Murad

Updated February 07, 2020

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An appeal was filed and the FBR’s appellate authority itself decided in favour of the Sindh government, but the amount had not yet been refunded. — DawnNewsTv/File
An appeal was filed and the FBR’s appellate authority itself decided in favour of the Sindh government, but the amount had not yet been refunded. — DawnNewsTv/File

KARACHI: The Sindh government is “seriously thinking” that the Federal Board of Revenue should be told that the provincial motor vehicle registration wings of excise and taxation department would no longer collect the withholding tax on behalf of the FBR since the latter was unilaterally deducting massive funds from the provincial government accounts and was reluctant to return them.

At a recent meeting, Sindh Chief Minister Syed Murad Ali Shah was told that the FBR was “only engaging” the provincial government for returning over Rs8 billion the FBR had “unconstitutionally” deducted from the provincial government’s account, or else “it is not in the mood to refund the money”.

The officials at the meeting said from 2012-13 to 2016-17, the FBR had “unilaterally and unconstitutionally” deducted more than Rs8,054.5 million from the provincial consolidated fund account.

Since the provincial government has been raising the issue of refund at different forums, the FBR was giving the impression that it would return the deducted cash, the officials said.

The chief minister was told in 2012-13 that the FBR created an “incorrect demand” and deducted Rs695.235m from the provincial account without waiting for reconciliation.

An appeal was filed and the FBR’s appellate authority itself decided in favour of the Sindh government, but the amount had not yet been refunded.

In 2014-15, the federal board changed and enhanced the rates of withholding tax and, “arbitrarily deducted” another Rs86.3m in advance, the CM was told.

In 2016-17, the meeting was told, “the board created yet another exaggerated demand and unjustifiably took away Rs294.89m on June 14, 2017”.

The chief minister was told appeals had been furnished in the FBR forums concerned, but those appeals had repeatedly been remanded back without any decision and the matter was still pending.

CM Shah said the Sindh government on behalf of the FBR was recovering withholding tax, which meant the E&T department was providing FBR its services against which huge amounts were being deducted or taken away from the Sindh government account.

Mr Shah proposed that it might be suggested to the FBR to set up its counters at the motor vehicles registration wings and collect withholding tax on its own.

“We are fed up with their attitude and we may not be able to provide them this service anymore,” he said directing the E&T department to prepare a summary for the cabinet to discuss the issue and settle it once and for all.

Protection of heritage at Karoonjhar hills

Sindh Chief Minister Murad Ali Shah said in another meeting that protection of cultural, religious and archaeological heritage at Karoonjhar Range was his top priority before exploring the potential of minerals, including granite, china clay, iron ore, fuller’s earth and gold.

He presided over a meeting of mines and minerals department to discuss mining issues at Karoonjhar Range in Tharparkar which was attended by Mines and Mineral Minister Shabbir Bijarani, MPA Qasim Soomro, chairman of TDAP Arif Ahmed Khan, principal secretary to CM Sajid Abro, secretary mines Zulfiqar Shah, and other officials.

The meeting participants were told that over 10 billion tonnes of granite deposits were available at Karoonjhar Range besides immeasurable reserves of china clay, iron ore, fuller’s earth and gold deposits.

The chief minister said such huge deposits would bring prosperity to the province, particularly in the region itself once they were tapped.

“But, before unlocking the reserves we will have to safeguard and protect the cultural, religious and archaeological heritage present in the mountains,” he said.

The secretary of mines said Karoonjhar Range covered huge wildlife sanctuaries spread over an area of 200,000 acres.

There were 28 dam sites covering 17,930 acres and 20 archaeological sites.

The chief minister said all cultural, historical, religious and potential tourism sites should be protected and safeguarded.

The forest land should be excluded from the area on which mining for granite or other minerals was proposed to be allowed.

He said licences or permits for granite mining in Karoonjhar area, if granted, should be made conditional with setting up of industry within the limit of Tharparkar district to ensure value addition, employment generation and positive social benefits of the activity.

Mr Shah also asked the department concerned to prepare a draft policy under which at least one-third of mining permits might be reserved for the residents of Thar to ensure their inclusion and participation in the mining activity.

It was pointed out the Indian government was making billions of dollars from minerals falling on the other side of the border; as they were exploiting the resources and selling granite across the world.

“Sindh can follow the course, if all protected areas are safeguarded,” Murad Shah said.

The chief minister asked the department to present a detailed briefing for the cabinet to formulate appropriate policy for mining.

Published in Dawn, February 7th, 2020