KARACHI, Oct 28: The Sindh Excise and Taxation department has initiated physical surveys of new markets and businesses to bring more professionals in the tax net. Presently, about 245,000 professionals and persons engaged in trade, callings and employment pay professional tax at the rate of Rs150 per annum.

The Sindh government collected Rs 134.7 million from professional tax in FY06 against Rs125.4 milion in FY 05 registering 10 per cent increase.

The tax is payable by persons engaged in any profession, trade, callings and employment. For companies the tax is assessed on the basis of income tax paid during the preceding financial year.

The professionals and companies falling in the tax net are required under the law to file tax returns by Aug 31 every year. The tax of the professionals employed by the ministries and government departments is deducted at source on June 30 every year and deposited in the treasury.

Director Taxation Javed Memon told Dawn on Friday that efforts were being made to expand the tax net. The department regularly conducts surveys of new markets and businesses, which has resulted in an estimated 10 per cent increase in the number of taxpayers every year.

The tax rate for limited companies, Modarabas, mutual funds and other corporate entities has been fixed on the basis of their paid-up capital or share capital and reserves recorded in the previous year. The tax rate for companies with a paid-up capital not exceeding Rs10 million is Rs10,000; Rs15,000 for firms with capital exceeding Rs10 million but not exceeding Rs25 million; Rs20,000 for firms with capital in excess of Rs25 million but not exceeding Rs50 million; Rs50,000 for firms with capital over Rs50 million but not exceeding Rs100 million; Rs75,000 for firms with capital in excess of Rs100 million but not exceeding Rs200 million; and Rs100,000 for firms with capital over Rest 200 million.

The professional tax net encompasses all holders of import and export licences, owners of industries, factories and commercial establishments, contractors of all types, including construction, wholesalers and their agents, stockists, agency holders engaged in selling or buying goods and services on commission basis, medical and legal practioners, auditors, accountants, architects, car dealers, real estate agents ,video and other shops etc.

The minimum tax rate for these businesses with a capital not exceeding Rs0.5 million is Rs500, while Rs10,000 tax is charged from businesses with a capital not exceeding Rs100 million.

The tax rate for new establishments not assessed by the Income Tax department is Rs500 per annum. The owners of petrol pumps and CNG stations have to pay Rs2,500 as professional tax.

Mr Memon said that the tax rates had been greatly reduced over the years for the convenience of the taxpayers. The rate for companies with a capital exceeding Rs 200 million has been reduced from Rs 0.5 million to Rs100,000. Similarly, a flat tax rate has been fixed for petrol pumps, which were earlier charged on the basis of commission earned by them.