Sindh govt to get property tax

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Economic Updates - Pak Major Financial News

KARACHI: With the revival of the commissioner system in Sindh, all proceeds of the property tax have been transferred to the department of excise and taxation with effect from July 1, 2011.

The department had already been collecting property tax on behalf of the City District Government Karachi since the introduction of the local government system and transferring its proceeds to the CDGK after retaining collection charges.

Under the new arrangement, the department will retain all proceeds of the property tax around Rs1. 5 billion, according to rough estimates which will give a big boost to its financial strength.

Director-general of the excise & taxation department Shoaib Siddiqui told Dawn that the directorate of property tax was fully conversant with the assessment and collection of the tax and would continue to issue challans and collect the tax. However, he added, the department would have to put a system in place for issuing challans to owners of industrial and residential properties located in the interior of Sindh as the task had previously been handled by town officers of district governments.

Mr Siddiqui said that the department has started issuing computerised challans to the owners of property units in B division mostly comprising commercial markets located along and around M. A. Jinnah Road.

To begin with, 3,000 to 4,000 computerised challans have been issued on a trial basis, he said.

After the success of the operation in the B division, the system would be extended to other divisions, he said, and said that computer-generated challans would save considerable time of the directorate staff handling the job of issuing challans manually.

The staff left without work owing to the computerised system would be utilised in increasing recoveries.

Fresh survey and other taxes

About the new survey of property units which is mandatory every five years to revise property tax rates, the E&T official said that the last survey was carried out in 2001 and, therefore, a fresh one was due in 2005. Since the CDGK failed to carry out a fresh survey since then, the Sindh government would take steps in this regard at the earliest.

The assessment and collection of professional tax in the province has also been geared up with the help of the FBR income tax department. The data of income tax payers have been obtained from the FBR as people paying income tax are eligible to pay professional tax.

The department hopes to raise the number of assessees of professional tax by 20 per cent as a result of the exercise.

Mr Siddiqui said that negotiations with the customs authorities were in an advanced stage for the collection of infrastructure cess (IC) on imports through the automated system of clearance at the Karachi Port. The Sindh government charges IC at the rate of 0. 75 per cent on all imports landing in Karachi. However, goods imported by the federal and provincial governments are exempt from the tax.

The cess is at present collected manually on goods declarations filed for the clearance of imports and this is prone to corruption and often leads to leakage of revenue, the official said, adding that the department s revenue would increase substantially following an SHC directive allowing it to encash 50 per cent of bank guarantees deposited in the court by importers against the payment of cess.

The department has so far encashed bank guarantees to the tune of Rs580 million out of a total amount of Rs5 billion.

It collects bout 70 per cent of the total Sindh government revenue by contributing over Rs20 billion every year.

Courtesy: Dawn

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