Sindh governor calls for change in tax culture

KARACHI: Sindh Governor Muhammad Zubair on Wednesday asked political parties to condemn tax dodgers instead of supporting them in order to transform the tax culture.

Zubair said the government introduced high withholding tax rates for non-filers of income tax returns in order to ensure their compliance.

“But, non-filers are still opposing this… unfortunately, the political parties are also supporting the non-compliant people,” he said, addressing an event organised by the Sustainable Development Policy Institute (SDPI).

The governor expressed displeasure over the remarks of other speakers to close down the Federal Board of Revenue (FBR).He said when the present government took office, the country’s total revenue collection was only Rs1,900 billion.

“The Federal Board of Revenue should be complimented for showing a significant growth in revenue collection.” Zubair said high revenue collection can enable the government to raise the provincial share in divisible pool to help them increase spending on health and education. “The political parties should ask the non-filers to file their returns and then criticise the Federal Board of Revenue,” he added.

The governor said there are, however, weaknesses on the part of the Federal Board of Revenue. He advised the private sector to blatantly express their problems.

Tax Reforms Commission (TRC) was constituted three years back, which was mostly represented by experts from the private sector. They agreed to the Tax Reforms Commission’s recommendations.

On budget, he said budget should be business-friendly and finalised after meeting with major business players. The governor said the present government is paying special attention to Karachi, which is the country’s financial hub. 

Zubair said the Prime Minister Nawaz Sharif is giving priority to the projects started in Karachi.

Farooq Sattar, leader of Mutahhida Qaumi Movement Pakistan stressed the need to improve tax to GDP ratio and bring all taxable income into the tax net.

Sattar said the formula for distribution of funds to districts by the province should be adopted much like the national finance commission.

He said a provincial finance commission should be constituted and property tax collection’s authority be delegated to districts from Sindh government. Motor vehicle tax collection authority should also be given to districts, he added.

The Sustainable Development Policy Institute officials presented the key issues of taxes especially after the 18th amendment to the constitution. He said double taxation is still prevailing and taxpayers are facing multiple tax authorities.

The Tax Reforms Commission, constituted by the federal finance minister, focuses only on Federal Board of Revenue affairs. Sustainable Development Policy Institute official Hammad Siddiqui called for uniformity in federal and provincial tax laws and a single return form. Siddiqui said such harmonisation of taxation has successfully been implemented in European Union.