Sindh finance committee to deliberate on VAT bill on April 19: MPAs maintaining dubious silence

Sindh legislators are maintaining a dubious silence on the VAT bills as no pragmatic move has been made on the issue in the Sindh Assembly so far. The standing committee on finance, government of Sindh, has been summoned on April 19 to deliberate on the issue and find a way out of this quagmire.
According to well informed sources it appears that the President and the Prime Minister are not willing to accommodate the demand of Sindh, indicating that the Federal Board of Revenue has prevailed on the issue on the plea that if Sindh collects the tax on services, the whole concept of VAT mode of collecting taxes would collapse and become impossible to implement.
The Federal government, in pursuance of enactment of federal VAT bill 2010, had forwarded to all Assemblies the provincial VAT bill 2010 proposed to be enacted by all Provincial Assemblies. After enactment of the provincial VAT bills, FBR would be in a position to collect taxes in the VAT mode under VAT 2010.
FBR Chairman has been airing that VAT bill 2010 and its implementation is subject to ratification by all provinces, empowering the federal government to levy and collect the taxes on services. On the factual position, the tax on services is the domain of provinces. Sindh alone on this had a long debate before the NEC discussions and eventually was able to get agreement of all provinces to stamp NFC allowing them to levy and collect tax on services.
This was built in the language of NFC award but later deleted in the presidential order. Sindh, since the issuance of presidential order, had been agitating to seek amendment in the presidential order for reconciling with the demands of NFC that is to allow province to levy and collect the tax on services if so desired by the province.
On the other hand, FBR never tabulated this point that VAT mode needs to be developed within the constitutional compliance's that provinces could levy and collect tax on services. In haste, Sindh government has called the standing committee to see both bills--one sent by the federal government through FBR, and the other made by the former Attorney General of Pakistan Makhdoom Ali Khan who has been hired by Sindh Government since the discussions of NFC were made known.
It would be seen as to how, on Monday, the standing committee is going to make recommendations for enactment of the bill in the Assembly. Whether the bill to allow province to levy and collect taxes will triumph for enactment or the bill sent by FBR would be allowed for enactment? All depends on the outcome of the meeting of the standing committee in the Provincial Assembly in which experts have also been called to guide in the deliberations and provide input to the committee.
However, it appears that since the presidential order has not been amended to accommodate the viewpoint of the Sindh Government to collect and levy the tax on services, the party in power in the province may succumb to the pressure of party higher-ups ruling the federal government.
The outcome will eventually expose the political face of Sindh Government before the people as the genuine defender of the rights of the province or a compromise for the reason that federal government needs the support of Sindh government for steering the IMF program for release of future tranches.