KARACHI: The Sindh government has set Rs 235 billion revenue collection target for sales tax on services for the next fiscal year (FY24).
While presenting the Sindh Budget proposals for FY24 on Saturday, Chief Minister Sindh Syed Murad Ali Shah said the Sindh government has adopted Alternate Delivery Channels (ADCs) mode for the collection of Sindh sales tax on service to facilitate the taxpayer to use digital platforms of online banking, credit/debit card payments, etc. Likewise, e-stamps have been launched by the Board of Revenue (BoR) whereby customers can obtain e-stamps through the BoR’s website.
The collection target for Sindh sales tax on services has been set at Rs 235 billion against Rs 180 billion for FY23, showing an increase of 30.5 percent or Rs 55 billion. The revenue collection target for levies under Excise & Taxation is Rs 143.27 billion, and for levies under the Board of Revenue has been set at Rs 55.218 billion for next fiscal year. The augmented collection is expected in the next fiscal year is estimated Rs 469.9 billion for tax revenue for FY24.
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A provision of Rs 96 billion has been kept for the next fiscal year for repayment of principal amount of loan and interest charged on it. It includes Rs 48.0 billion for repayment of principal amount of domestic.
In addition, a provision of Rs 48 billion has been kept for repayment of interest amount including Rs 25 billion earmarked for interest payment over pensioners’ benefits to government employees. The marked increase in repayment component indicates forex exchange fluctuations in rupee dollar parity from Rs 160 to Rs 300 per US dollar during the last 12 months.
Shah said fiscal governance reforms government of Sindh is pursuing various governance reforms aimed at improving transparency, accountability and service delivery because effective governance plays important role in socio-economic development. To this end, Public Financial Management (PFM) Reform Strategy and Action Plan have been developed to execute Public Financial Management Reforms.
Under PFM Reform Strategy, the Sindh Tax Revenue Mobilization Plan (STRMP 2021-22 to 2025-26) has been developed and approved by the Provincial Cabinet in FY 2022-23.
The Sindh government has undertaken a wide range of tax reforms during the period FY2018-19 to FY2022-23 and raised the collection from Rs. 100 billion to Rs. 180 billion. Whereas, the overall provincial tax receipts have increased from Rs 183.905 billion to Rs 385 billion during the same period.
The CM Sindh expects to achieve the target of tax receipts Rs 600.0 billion under STRMP-II. The Budget Strategy Paper (BSP) during the next fiscal year. It is a policy document which proposes budget Strategy of Government for the period of next three financial years. It has been instrumental to make budgetary formulation process more transparent and participative, he mentioned.
In a move to empower local councils, government of Sindh has transferred the authority and function of collection of Property Tax along with its administration and management of human and physical resources to local councils, under the administrative control of Local Government Department. The idea is that tax payers must get the benefits at their doorsteps. Their financial resources will strengthen as Local Councils are likely to generate revenue up to Rs 10 billion annually. As per budget estimates for year 2023-24 for Excise and Taxation has been kept at Rs 7.108 billion against current year’s allocation of Rs 5.7 billion this year. The proposed allocation will be instrumental in implementing some vital reforms in the areas of vehicle tracking and surveillance.
Copyright Business Recorder, 2023
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