KARACHI: Federal Finance Minister Muhammad Aurangzeb on Saturday assured the Sindh government that the issue of at-source deduction of taxes from the provincial government’s head by the Federal Board of Revenue (FBR) and other federal entities would be resolved amicably.

This emerged in a meeting between the federal minister and Chief Minister Syed Murad Ali Shah at the CM’s House.

Official sources said that the federal minister and the chief minister agreed to collaborate in order to attract foreign investment and boost exports, thereby enhancing the financial stability of the province in general and of the country in particular.

The chief minister told the federal finance minister that the FBR and other federal entities were illegally implementing at-source deductions, contrary to established policy. “The federal government has been deducting money from the provincial government’s head through at-source deduction,” he added.

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Mr Shah said that recently, the federal government had deducted a total of Rs13.4 billion, out of which Rs8.2bn was for electricity bills of the Hyderabad Electric Supply Company and Rs5.2bn for Sukkur Electric Supply Company.

He pointed out that his government had always paid its electricity bills on time, and if there were any outstanding bills that needed to be reconciled, the federal government should have brought the issue to their attention instead of making at-source deductions.

The CM also said that the FBR after reading a news item of the cars registered in Sindh from 1948 to 2015 had deducted Rs6bn of the province at-source.

“Despite the resolution of the issue, still the amount has not been refunded,” he added.

The federal finance minister told the CM that he was working to develop a proper professional working relationship between the federal and provincial organisations. “The federal and provincial organisations and institutions have to work together, learn from each other’s expertise, support each other for growth and cooperate for collective uplift and development,” he said.

Mr Aurangzeb assured the CM that the at-source deduction issue would be resolved amicably.

The CM and the federal finance minister also discussed the price escalation of industrial gas.

Mr Shah told the Mr Aurangzeb that the industrialists were quite upset with the increase in industrial gas prices.

The federal finance minister said that during his meeting with the industrialists, they also complained to him. Therefore, they agreed to discuss the matter with the federal minister for petroleum to resolve the issue.

The chief minister said that in the federal public sector development programme (PSDP), the provincial government was not given any new scheme during the last eight years. “Compared to Sindh the other provinces have been given new schemes in the federal PSDP,” he complained.

Mr Aurangzeb and Mr Shah agreed that the issue of PSDP’s new schemes would be discussed with the federal minister for planning and development.

It was also agreed that the federal and provincial governments would work together to develop the agriculture sector on scientific and modern methods.

It was pointed out that there was ample potential to cultivate export-quality crops, vegetables, fruits, and dairy products so that they could be exported to earn foreign exchange.

The CM told the federal finance minister that he was working to introduce new technologies to improve crop yield and measures being taken to ensure the provision of certified seed in the market.

The chief minister and the federal minister also agreed to attract foreign investment in different sectors for which investment procedures would be made simple and automated.

Published in Dawn, March 31st, 2024