KARACHI, Aug 19: The Registration, Stamp and Evacuee Property Wing of the Board of Revenue, Sindh, has nullified an impression that the Sindh government has raised stamp duty on finance and security documents and that no other province is recovering stamp duty in such cases.

Describing this impression as untrue, sources said that stamp duty on financing documents based on markup basis was previously reduced from one per cent and levied at 0.2 per cent with upper limits, under the Sindh Finance Ordinance 2001, on the recommendations of Pakistan Banking Association as under:

(i) where the amount does not exceed Rs 1 million (0.2 per cent or Rs 1000 whichever is less)

(ii) where the amount exceeds Rs 1 million (0.2 per cent or Rs 2500 but does not exceed Rs 10 million whichever is less)

(iii) where the amount exceeds Rs 10 million (0.2% or Rs5,000 but does not exceed Rs 100 million whichever is less)

(iv) where the amount exceeds Rs 100 million (0.2 per cent or Rs10,000 whichever is less)

Enquiries revealed that there was a realization then that placing a cap on upper limits is not only discriminatory in nature, horrendously low but also unjust, unfair and inequitable to other clients of stamp wing as far as their stamp duties are concerned. Hence, with the approval of competent authority, the upper limits were withdrawn by amending the relevant law through an Ordinance of June 15.

The sources said that it still remained below one per cent countrywide stamp duty in other federating units i.e. 80 per cent less than the largest province.

To resolve the issue amicably, recently the Sindh finance minister, held a meeting with a delegation of businessmen and, according to reliable sources, offered option to consider reduction in the existing rate of 0.2 per cent ad valorem and having upper limits as under:

(i) where the amount does not exceeds Rs 1 million Rs 1000

(ii) where the amount exceeds Rs 10 million (Rs 2500 but does not exceeds Rs 10 million)

(iii) where the amount exceeds Rs 10 million (Rs 10,000 but does not exceed Rs 100 million)

(iv) where the amount exceeds Rs 100 million (Rs 35,000 but does not exceed Rs 300 million)

(v) where the amount exceeds Rs 300 million (Rs 50,000 but does not exceed Rs 500 million)

(vi) where the amount exceeds Rs 500 million (Rs 100,000).

Accordingly, a summary has been floated for approval of the competent authority by Board of Revenue Sindh.

The stamp wing of Board of Revenue has introduced various measures like omitting 34 articles from the charging schedule and reduction in valuation table for a specific period of time, thus giving hundreds of million of rupees relief, to facilitate the businessmen and the general public in view of the overall recession in the economy.

However, according to RSEP Wing, the provincial revenue constraints and increasing needs for more allocations to social sectors are also required to be kept in view.

The Government of Sindh had insisted raise of 15 per cent revenue receipts each year for the next 3 years. The Stamp Wing of BoR Sindh strongly believes that stamp duty at the rate of 0.2 per cent ad valorem on all financing documents is just, fair and equitable.

It was, however, pointed out that in the Punjab, the rate of stamp duty is still one per cent on financing documents. It is 1.3 per cent in NWFP and two per cent in Balochistan.

The members of the delegation which met the Finance Minister accepted that in the Punjab loans to borrowers are being offered on a Rs 100 or Rs 50 stamp paper, which economic experts and bankers admit that it is unlawful, illegal, improper and a challenge to the writ of the government.

The Sindh cabinet in its meeting on Aug 13, approved the proposal of the Registration, Stamp and Evacuee Property Wing of Board of Revenue Sindh to reduce stamp duty from five per cent to three per cent and registration fee from 1.5 per cent to 1 per cent for conveyance deeds and all sorts of properties.

After six months, this shall be reviewed and if progress was found not good, the rates shall revert.

Earlier, the Sindh government had reduced the same duty from nine to five per cent in year 2000 and valuation table upto 20 per cent from Feb 1 to April 30.—APP