Sindh Sales Tax on Services (Amendment) Bill 2018 passed: PA targets urban centres

The Sindh Assembly on Wednesday passed 'the Sindh Sales Tax on Services (Amendment) Bill 2018 with a majority vote to entangle landlords in tax net, as the opposition termed the legislation 'biased'. The bill has been fashioned in a way to target only urban centers of Sindh, including Karachi. Now, the landlords renting their properties will have to pay a 3 percent of sales tax to the provincial government with a retrospective effect from 2015.
"The landlords who rent their houses will be brought into sales tax net," Sindh Senior Parliamentary Affairs Minister, Nisar Khuhro told the house. During the bill presentation, a verbal clash between Khuhro and MQM's legislator Muhammad Hussain also rattled the house. However, the legislation exempts hostels and boarding houses from the taxation. The MQM members who defected to the PSP also joined the protest with the main opposition party against the bill. The protesting opposition also called it 'discriminatory' against the urban parts of the province.
They said that the government should charge the tax on a property that is being used for commercial purposes. "This bill is tantamount to creating a gulf between the rural and urban parts of Sindh," Hussain said, adding that the PPP government has overburdened the urban parts of Sindh with undue taxation. "The PPP-government has converted Karachi into Thar," he resented, saying that the very government has spent Rs 700 billion over the past seven years but failed to allow and implement a single mega project for Karachi. "Where this money [Rs 900 billion] has been spent," the MQM lawmaker questioned the government. Other MQM legislators also asked the government to impose the tax on agriculture land, fisheries' farms and such other rural properties used for commercial purposes.
MQM's veteran, Syed Sardar Ahmed said that renting a property does not qualify in sales tax on services, citing a court decision that the assembly cannot make law against the public interest. "This amendment act bank on biases," he said, adding that renting a property is not a commercial activity. He also called the bill a 'reason' behind urban and rural divide.
"Urban Sindh already pays Rs 100 billion tax. A variety of taxes are being imposed on urban parts," he regretted, saying that the MQM had been on a frontline in struggle to empower the provinces to collect taxes. He said that the government should stay away from taxing property or a plot being rented.
The urban parts pay 85 percent of Sindh's overall tax collections, he said, adding that similarly, the urban centers pay 99 percent of the total sales tax on services. He requested the treasury not to overburden the urban parts with more taxes.
In reply, Khuhro made it clear that the tax will only apply on those rented properties being used for commercial purposes. He said that the tax will be imposed all across the province. In a bid to dispel the impression of opposition, he said that the law will not create discrimination between urban and rural Sindh. The treasury voted in favor of the bill to pass it with a majority vote, despite opposition clamor.