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KARACHI: The Sindh Board of Revenue expects to collect sales tax on `stand-alone’ services to the tune of Rs25 to Rs30 billion per annum.
The focus of the board would be to target those sectors which have so far remained untaxed, official sources said.
The board is working on plans to bring those sectors under sales tax net which remained untaxed and an official of the board told Dawn that around Rs4 billion alone could be collected from port-related activities.
Sources said that there were around 700 freight forwarders, customs agents, hotels and restaurants, shipping agents, terminal operators etc., who will have to deposit sales tax on services with board.
In short, all those providing services in the province would have to make payment of sales tax to the board.
Already, the sources said that the board had entered into an understanding with freight forwarders to pay Rs200 per B/L.
The board has also entered into an arrangement with the AG Sindh and National Bank of Pakistan for collection of tax.
For automation of the entire working of the board, services of Pakistan Revenue Automation Ltd (PRAL) have been obtained and the entire system would be fully computerised within a month, he added.
Once automation work is completed, the board would also collect motor vehicle tax, excise, property tax, CVT, and income tax on agriculture.
The high official of the board assured that taxpayers would not be harassed and only once a year audit would be carried out and hoped that public-private support would make the system success.
The sales tax on telecommunications would be directly deposited in the provincial government’s account. The official disclosed that the board also expects to collect around Rs7 billion from banks and insurance companies.
The board official clarified that contrary to general notion that the sales tax being collected by the board is a new tax, he explained that under Ordinance 2000 the sales tax was being collected by the Federal Board of Revenue (FBR) on behalf on provinces but now the same is being collected by the province of Sindh.
The official hoped that once collection of Workers Welfare Fund (WWF) and Employees Old-Age Benefit Institute (EOBI) if as per the 18th Amendment are transferred to provinces, the board could collect between Rs10 to 15 billion.
Sources said that the board is being fully automated and entire revenue collection, filing of returns and refund payments systems has been computerised and there would be no direct link between taxpayers and tax collectors which would help minimise corruption.
The automation of sales tax on services allows the board to have reconciliation of receipts and payments on daily basis and all bank challans would also be computer friendly.
A high official of the board disclosed that meetings with trade bodies and other prospective taxpayers of sales tax on services have been highly encouraging.
The board would also be collecting Sindh infrastructure tax which would help plug leakages and result in higher revenue collection needed for developing roads network across the province.
Responding to a question, the official said that on 15th of each month taxpayers will have to deposit sales tax in designated branches of the National Bank of Pakistan (NBP) and would have to file return by 18th of each.
The board plans to open regional offices to facilitate taxpayers in Hyderabad and Sukkur, the official said and hoped that higher revenue collection would be possible.
