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Murad Directs Board of Revenue to Improve Tax Collection, Propose Revival of Abolished Tax

Karachi, The Sindh Board of Revenue has faced a significant shortfall in tax collection over the past three years, achieving less than half of its revenue recovery target. Sindh Chief Minister Syed Murad Ali Shah, at a meeting held at the CM House, directed the Board to propose the revival of abolished taxes and improve its e-stamping regime to address the shortfall.

According to Chief Minister Sindh, from 2020-21 to 2022-23, the Board of Revenue (BOR) had a revenue recovery target of Rs100,640 million but managed to collect only Rs48,526 million, resulting in a shortfall of Rs52,114 million. The Chief Minister emphasized the need for the BOR to bring efficiency to its revenue collection processes and proposed reforms to address the shortfall.

The meeting was attended by several officials, including Chief Secretary Asif Hyder Shah, Secretary Finance Fayaz Jatoi, SMBR Baqaullah Unar, and others. The Secretary of Finance highlighted that in the current financial year, the BOR has a target of Rs55,218 million, but the nine-month recovery was only 33.57%, amounting to Rs13,901 million.

SMBR Baqaullah Unar detailed the collection performance of the BOR. The Water Rate Recovery target was Rs805.309 million, but the department collected only 9.2% or Rs74.540 million in 2022-23. Out of 6,090 Dehs in the province, the collection from 3,917 Dehs was assigned to the Revenue Department, while the rest was managed by the Sindh Irrigation Drainage Authority (SIDA). The Agriculture Income Tax (AIT) had a nine-month target of Rs2,723 million, but the BOR collected only 44.82% or Rs1,220 million. The Stamp Duty collection stood at 33.24%, with a target of Rs36,787 million and a collection of Rs12,229 million.

The Chief Minister expressed concern over the shortfall in Stamp Duty and emphasized that the overall economic situation, including Federal Board of Revenue (FBR) taxes on immovable properties, has impacted tax collection. He proposed that the threshold for AIT exemption should align with the FBR threshold, and manual crop inspection, assessment, and collection procedures be digitized to enhance efficiency.

Regarding the e-stamping regime, the National Bank has 142 branches issuing e-stamps, while Sindh Bank has added 100 branches. An agreement with the Bank of Punjab is pending approval from the State Bank of Pakistan.

Mr. Shah directed Chief Secretary Asif Hyder Shah to convene a meeting to review BOR’s tax collection mechanisms, identify shortcomings, and suggest improvements. The Chief Minister also directed the SMBR to submit a proposal for revising old tax rates and reviving abolished taxes for discussion and approval.

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