KARACHI, Sept 16: Sindh Finance Minister Dr Hafeez Shaikh on Monday said that the road usage tax, replacing motor vehicle tax will be implemented from January 1, 2003 in the country.
Addressing the members of the Karachi Chamber of Commerce and Industry (KCCI) Dr Hafeez who flew directly from Peshawar where he attended the meeting of the National Finance Commission (NFC) said the issue was discussed in the meeting of the NFC. Though it was the idea of Sindh but now it has been decided at the federal level that the road usage tax be enforced in all the four provinces.
He said the last two budgets of the province were very significant in regard to financial discipline and taxation as neither any new tax was levied nor rate of any existing tax was enhanced during the last two years, setting a trend to be followed afterwards, he added.
He said in 1990, the development budget of Sindh was 25 per cent of its total budget, which slimmed to 4 per cent in the year 2000, making $1 per person in the province. About the development budgets financed by the donor agencies, he said the lethargic and indifferent attitude of previous governments in the province, disheartened them. However, he said they have agreed to fund the development projects.
Hafeez Shaikh said Sindh was working on overdraft for the last 11 years and was paying Rs100 million per month as interest to the State Bank of Pakistan. He added that the present government saved this Rs100 million per month by paying off the debt.
He said the number of taxes, which were 23 have been reduced to 12 by eliminating small and nominal taxes that were creating problems for the businessmen instead of bringing some tangible amount into the kitty.
He said the Asian Development Bank (ADB) will provide Rs11 billion for developing road network in Sindh. The province has decided to pay off the expensive debt of federal government which was given at a rate of 17.7 per cent and would be retired from the World Bank loan. Sindh will be getting Rs6 billion per annum interest-free loan from World Bank, he added.
He said besides the federal government development projects, a sum of Rs14 billion will be spent on development schemes in Sindh this year.
Answering a question, he said the NFC award, to be announced shortly has been prepared in consultation with all the stakeholders, and is in the larger interest of the country and the provinces. He said whatever formula was decided in the past for NFC award, it was implemented. However, he said the goals were optimistic last time while the revenue recoveries were poor due to which it failed come up to the expectations.
He said he was ready to hold meeting with the chamber on property tax and professional tax. He invited their proposals for reforming the professional tax. Hafeez said the problems of the province was not merely the lack of resources in the past but the financial mismanagement and lethargic attitude was the reason behind the backlog.
Due to the mismanagement on the part of the provincial governments in the past, he added, the poverty incidence increased manifold in Sindh.
He said as per the study of the ADB, 5 districts of Sindh were living below the poverty line where the total income of 60 per cent of the families was one dollar a day. There was not one element responsible for this situation, he said, the politicians, Generals, bureaucrats, businessmen or any other segment of the society cannot be held responsible for this.
Answering another question, he said the provincial government has closed down unnecessary government departments. If there are more of such departments which were useless, he was ready to shut them down too, he promised.
He said when he took over, he visited various districts and enquired the then Deputy Commissioners about the status of the development projects. He was surprised over the ignorance of the officials about the status of the development projects. Now the things have changed, he added.
Earlier, President of the Chamber M. Haroon Bari presented the address of welcome.—APP