KARACHI, July 24: The Sindh government has fixed Rs6,000 million target for stamp duty collection for 2008-09, but the department’s new head says the target is unrealistic if seen in the context of new condition of an NOC from Karachi Building Control Authority for every property deal and two per cent Capital Value Tax imposed by the federal government.
The department collected Rs4142.4 million in the outgoing fiscal year against a target of Rs5,500 million. It suffered from Rs358 million shortfalls due to the CVT and the NOC.
Talking to Dawn, new Chief Inspector of Stamps Salahuddin Saand said that the new target could only be achieved if the NOC condition and the CVT are withdrawn.
He, however, said that he would leave no stone unturned to get close to the target fixed by the finance.
Sindh Board of Revenue sources very often complained about the CVT and described it against the province’s revenue interests.
Sources in the board told Dawn that when the FBR was approached to withdraw the CVT which is affecting the Sindh revenue, they advised the provincial revenue authorities to increase the property valuation table by hundred per cent and reduce the stamp duty rate from the current three per cent to two per cent.
The Sindh revenue department, however, did not accept the proposal suspecting foul-play as doubling of property value would only benefit the federal government as its income from CVT would increase manifold, but Sindh’s revenue would not get any significant rise.
The stamp duty directorate is suffering from an average shortfall of Rs350 million every year since the imposition of two per cent CVT and the KBCA NOC.
It will further suffer a loss of Rs500 million from withdrawal of 0.1 per cent stamp duty on electronic transfer of shares announced in the new budget.
Real state transaction contributes 55 per cent of the stamp duty revenue, followed by insurance sector which is 30 per cent and banks 15 per cent.
The directorate has reminded the general public that rate of stamp duty on allotment orders for residential plots from 200 sq yard to 400 sq yard is Rs10 per sq yard and Rs20 per sq yard on plots over 400 square yards. The stamp duty rate for commercial plots is Rs30 per sq yard while for industrial plots Rs5 per sq yard.
It advised the plots owners to first pay stamp duty on their allotment orders before presenting it to the registration department for any sale or purchase deal.