Lower tax rates help SRB outperform others

KARACHI: The Sindh Revenue Board (SRB) outperformed all other revenue collection authorities in the country for the fourth consecutive years and the secret of this lies in its lower rates of various taxes, says an expert.
Dr Hafeez Pasha, former finance minister, said Sindh did the best work in revenue collection and surpassed the other provinces. He said with collecting more revenues, Sindh had proved that by
levying lower taxes, higher revenue could be collected. Sindh was charging the lowest GST in the country, at the rate of 14 percent against 17 percent implemented by the federal government. However, in the last three years, telecom sector’s tax remained at 19.5 percent, which has now been reduced to 18 percent for 2015/16.
Pasha said the federal government unnecessarily was engaged in encroachment of provincial taxes. The federal government was charging advance withholding tax on telephone calls, which was a provincial matter, he said. People are paying 35 percent taxes on phone calls.
With a cut in tax numbers, the SRB surpassed its revenue collection target of Rs49 billion for the year 2014/15, and increased its target by 20 percent to Rs61 billion for the fiscal year 2015-16, an official told The News.
In 2014-15, the provincial department collected Rs49.10 billion against the target of Rs49 billion. It is the fourth continuous year, since its induction in 2011, when the SRB achieved its target. Sindh had cut down the sales tax by one percent in 2011-12 to 16 percent, which was further cut by one percent to 15 percent in 2012-13 till 2014-15, while it was further reduced by one percent to 14 percent in the current budget, Zafarullah Shaikh, spokesman of the SRB told The News. “Tax of programme producers is being lowered to six percent from 10 percent,” he said.