KARACHI, May 18: The Sindh Board of Revenue is likely to suffer a shortfall of Rs975 million in stamp duty collections during the current fiscal. The statistics released by the Stamp Wing of the SBR put the revenue collections during July-April 2006-07 at Rs3,025.3 million against a fiscal target of Rs4,800 million.
The board hopes to collect another Rs800 million each in May and June, but will still be far behind the target.
An official of the Stamp Wing told Dawn that after reconciliation of accounts in different banks at the end of the year the revenue might reach Rs4,000 million.
However, an analysis of the monthly collections of stamp duty indicates that revenue shortfall may exceed Rs975 million as there are little chances of average collections during the months of May and June due to the ongoing lawyers boycott of courts and frequent strikes by political parties.
According to monthly break-up of stamp duty collections, the highest amount (Rs402.6 million) was collected in February followed by Rs346 million in November, Rs331 million in March, Rs324 million in December, Rs308 million in August and Rs301 million in September. The average per month collection ranges between Rs300 million and Rs400 million.
The total collection of stamp duty revenue during the 10 months stood at Rs3,025 million, which is 8.8 per cent more than the collections made during the corresponding period last year, yet it still has to go a long way to reach the target of Rs4,800 million fixed for the current fiscal.
The major stamp duty collection is made from three per cent duty on property transactions at the time of registration of sale deeds, which has been under serious pressure since the Karachi Building Control Authority imposed condition of NOC for registration of sale deeds.
The decision, which has been challenged in the Sindh High Court, has adversely affected the stamp duty revenue since the number of sale deeds according to a property dealer dropped by 70 per cent.
The NOC condition has stopped property transactions mostly belonging to the apartment blocks as these residential complexes take several years to complete even after the occupants take possession of their flats. However, no flat can be purchased or sold unless the builder obtains an NOC from the KBCA.
Chairman of United Clifton Defence Estate Agents Association Raja Mazher said that two per cent CVT levied on registration of property transactions in the last budget is the main factor for decline in stamp duty revenue.
There is an additional 1.5 per cent municipal tax on registration. He said that the condition of NOC for registration of sale deeds had opened doors of corruption as the KBCA was demanding NOC for houses, which have obtained completion plans.
Chairman, Association of Builders and Developers, Hafeez-ur-Rahman But, said that the total tax impact on registration of property transactions in Sindh is seven per cent against only two per cent in Punjab. He suggested that the stamp duty on property deals should be reduced to one per cent as recommended in the national housing policy. This has totally stopped investment in estate and construction sectors, he added.
Another leading property dealer Syed Ather said that the main reason for slowdown in the property market is unusual high prices of property, which have gone out of reach of buyers’ pocket.