Sindh Budget: Sales tax on telecom services increased

KARACHI: Sindh government has increased the sales tax on telecom services to 19.5 percent from 19 percent in order to bring it at par with other provinces. Sindh Chief Minister Syed Murad Ali Shah said slight amendments had been introduced in the Sindh Sales Tax on Services Act with the objective of improving the taxation system and procedure.

“For next financial year of 2017/2018, the province proposed to rationalize rate of Sindh sales tax on telecom services, and bring it at par with other provinces, by increasing it from 19 percent to 19.5 percent,” Shah said, while announcing the provincial fiscal measures for the fiscal 2017/2018.

“Telecom sector is already charging this amount from consumers. This will allow the provincial government to generate an additional amount of Rs400 million,” Shah added. The chief minister also announced concessionary measures to boast economic activity, which included: reduction of Sindh Sales Tax on Travel Agents and Tour Operators to 8 percent from 10 percent; reduction of SST on services provided by specific class of Indenters and Call Centers to 3 percent from 13 percent; reduction of SST to 3 percent from 8 percent on the services of renting of Immovable Property Services.

Shah said Sindh Revenue Board (SRB) would able to achieve its collection target of Rs78 billion during the outgoing fiscal year.  “For the next financial year target of the board is being enhanced to Rs100 billion as per the Sindh Tax Resource Mobilization Plan,” he added.

Highlighting agriculture income tax (AIT), Shah said present collection on account of AIT stands at Rs393 million. “This tax has a lot of potential and can provide much need fiscal space for development of Sindh,” the chief minister said.  “Hence, in consultation with leading agriculturists, farmers and parliamentarians, the provincial government decided to increase the target of AIT to Rs1 billion for next financial year.”

Also, World Bank sponsored Trust Fund for Accelerated Growth and Revenue (TAGR) in collaboration with Economic Reforms Unit, Finance Department is studying the Agricultural Income Tax for possible policy changes and improved collection, Shah said.