The Sindh Assembly on Saturday unanimously passed Sindh Finance Bill 2008 into law with two major amendments, one providing one percent increase in sales tax, and the other imposing 'luxury tax' on both "imported and locally manufactured or assembled motor cars of a specified category".
The session was held with usual 100 minutes delay at around 11:10 am under the chairmanship of Speaker Nisar Ahmed Khuhro. The government, amending the Sindh Sales Tax Ordinance, 2000, increased sales tax from 15 to 16 percent, and another, amending Sindh Motor Vehicle Taxation Act, 1958, imposed one-time 'luxury tax' on both imported and locally manufactured/assembled motor cars defined in Provincial Motor Vehicle Ordinance, 1965.
Under four different categories the government would levy Rs 5,000 for importing a car of 1500 cc to 1999 cc, Rs 50,000 on 2000 cc to 2999 ccc and Rs 0.1 million on cars of3000 cc and above. The local manufacturers and assemblers would have to pay Rs 5,000 on a motor car of 1500 cc and above engine capacity, says the bill.
However, vehicles to be used for transport or commercial purpose have been exempted from taxation by the Sindh Motor Vehicles Taxation Act, 1959, bought by the federal or provincial governments and those notified by the government.
The provisions of the Finance bill, which would come into force from July 1, 2008, also include an amendment in Article 31, Clause (a) of Stamp Act, 1899 which says "1.5 percent of the face value of shares subject to a minimum of one rupee on physical and on withdrawal from the Central Depository Company (CDC)" and "0.10 percent of the face value of shares deposited to the Central Depository Company."
Chief Minister Qaim Ali Shah, while moving the motions, said that no major change was being made in the Finance Bill except increasing the infrastructure maintenance cess; rather the government had abolished duty on the CDC. On this, opposition member Arif Mustafa Jatoi criticised the treasury saying that the government was giving relief to 'Seths' (shareholders), who are earning billions of rupees income daily, instead of the poor who are dying of hunger and compelled to buy one kg flour at Rs 26.
Revenue Minister Murad Ali Shah was quick to respond that the levy which was unpopular in the world and was never collected by the previous governments for the last 10 years was not on income but on the transfer of shares.
Minister for Information Shazia Marri termed the Bill as "realistic" and "sensibly made" and said that had the opposition really been poor-friendly the rate of unemployment would not have been so high today.
Another entry made in section 9, sub-section (1) of the Sindh Finance Act, 1994 says "provided that cess on gold shall be charged at the rate of 0.125 percent of the total value assessed by the Customs officials."
The government, making a 0.3 percent increase in "infrastructure maintenance cess", to be paid by importers using infrastructure of the province, also determined rates of the cess along with the distance (covered within the province) in accordance with net weight of the transportable goods.
According to the bill, the importer would have to pay 0.8 percent of total value (to the owner) of goods weighing up to 1,250 kg or as assessed by the Customs, plus one paisa per kg. Cess rates stand at 0.81 percent, 0.82 percent, 0.83 percent, 0.84 percent and 0.85 percent for goods weighing 1250-2030 kg, 2030-4060 kg, 4060-8120 kg, 8120-16000 kg and over 16000 kg respectively.
Sardar Ahmed of Muttahida Qaumi Movement (MQM) clarified that the cess was pending rationalised while a case was pending in the Supreme Court after reservations came from some quarters on federal level. Marri urged the traders to realise the importance of maintenance of infrastructure of the province, saying that the government had slapped the "earners of crores" with the levies.
On resumption of proceedings, leader of Opposition Madad Ali took the floor and protested against Secretariat staff who he said had given him a documented version of the assembly proceedings with 'For Jam Sadiq Ali' (his late father) written on it.
Demanding an apology from those involved he termed the act as "insulting" and requested the speaker to conduct an inquiry into the matter to bring the fact to surface. Marri, backed by Murad Ali Shah, Mazharul Haq and the speaker, said there was no question of insult and this was done to pay tributes to all those who had served the provincial assembly in the past.
She thanked the staff of Secretariat for what she said honouring her by writing the name of her father on the books provided to her. "We all should be proud of it, and I am, " she added. The treasury also introduced the Sindh Land Revenue (Amendment) Bill, 2008 to be considered in the next normal session on Monday, June 30.