The PML-N-led federal government came under strong criticism on Friday at the Sindh Assembly where the PPP-led provincial government blasted the center for ‘poor governance’ at the federal level.
Slamming the federal government for having twice revised southward revenue targets for the Federal Board of Revenue (FBR) during the outgoing FY13, the provincial government demanded of the center to also authorise the federating units to collect the general sales tax (GST) on goods.
The Sindh government was also critical of the federal government for the latter’s failure to implement the provisions of 18th Amendment that deal with the collection of Zakat and the administration of Employees Old-Age Benefit Fund and Workers’ Welfare Fund.
The Sindh government also objected to the center’s imposition of Gas Infrastructure Development Cess (GIDC) that it said had affected “fiscal relations” between the federal and provincial governments.
Further, the provincial government also held responsible the federal government’s “poor tax collection” during FY13 that the former claimed made it cut its development expenditures downward.
“The provinces unfortunately have to bear the brunt of the poor governance at the federal level,” Sindh Chief Minister Syed Qaim Ali Shah told a 168-member Sindh Assembly which Friday saw the provincial government unveiling a deficit budget of Rs 686.17 billion for FY15.
The centre, he said, reset downward revenue targets for FBR first at Rs 2.345 trillion and then at Rs 2.275 trillion just last month in May. These revisions made Sindh face a shortfall of Rs 82 billion against budget estimates and Rs 61.4 billion against the revised estimates in its FY13’s share of federal transfers.
“Due to lack of fiscal decentralisation, we are heavily dependent on federal government for transfer of our receipts,” the leader of the house said.
Against the budgeted Rs 388.6 billion, the center had released Rs 327.2 billion till date, he lamented.
“We, therefore, call for further fiscal decentralization and after the success of Sindh government in collecting sales tax on services now call for the transfer of the collection of sales tax on goods to the provincial government,” said Shah.
The chief minister, also holding the finance portfolio, also termed the center’s levy of GIDC as unconstitutional and demanded its immediate withdrawal saying all such taxes be imposed after consultation of the provinces. “The proceeds of such taxes/levies should be considered straight transfers to the provinces under Article 161,” he demanded.
The federal government, shah claimed, was acting against the spirit of Articles 161 and 172 of the constitution by unilaterally taxing a national resource.
“The subject of taxing a natural resource is a delicate issue and the federal government is strongly urged to refrain from acting unilaterally,” warned the PPP leader.
Shah also flayed the PML-N-led federal government for the latter’s poor tax collection in the outgoing fiscal year that, he said, kept the provincial government from releasing Rs 185 billion annual development programme in full.
