KARACHI, Dec 30: The Governor of Sindh, Mohammedmian Soomro, has approved a proposal for review of stamp duty on financing documents and its imposition at the ad valorem rate of 0.2 per cent instead of what has been fixed effective July 1, 2001, APP learnt from official sources.

Mr Soomro has asked the State Bank governor to issue a circular to all the banks and the DFIs in this regard.

The registration and stamp wing of the Board of Revenue, Sindh, has approached the provincial government for reinstatement of 33 posts of Inspectors of Stamps, who will be selected from amongst the law graduates.

These officials would inspect the public offices, financial institutes as per Stamp Act, 1899, to detect evaded or deficit stamp duties.

The Board of Revenue has urged all the public offices, financial institutions, banks, insurance companies to ensure that all previous transacted documents are properly and duly fixed and paid with stamp duty.

In pursuance of the Sindh Finance Ordinance, 2001, the stamp duty on financing documents was reduced from 1 per cent and bifurcated into the following four categories:

(a) where the amount does not exceed Rs1 million: 0.2% or Rs1000, whichever is less;

(b) where the amount exceeds Rs1 million but does not exceed Rs10 million:

0.2% or Rs2500, whichever is less;

(c) where the amount exceeds Rs10 million but does not exceed Rs100 million: 0.2% or Rs5000, whichever is less;

(d) where the amount exceeds Rs100 million: 0.2% or Rs10,000, whichever is less.

However, it was observed that stamp duties on financing documents, including cheques, bank drafts and pay orders, were either not being collected/deposited by most of the major banks or the documents were insufficiently stamped.

This was proved when the National Bank of Pakistan’s Corporate Branch, located in PIDC House, was inspected. It was revealed in cases transacted in the years 1998, 1999, 2000 and 2001.

Even after the promulgation of Sindh Finance Ordinance, 2001, it was observed that the writ of the government was wilfully challenged and disobeyed by the said commercial institution.

Further, the banks were also reluctant to provide information viz-a-viz amount collected and deposited on various types of stamp duty.

The sources maintained that the registration and stamp wing had proposed the re-thinking of the rate of stamp duty in force on financing documents as it was very low, not proportionate in reduction of other stamp duties, helps the rich and was discriminatory in nature.—APP