SRB may take over excise and taxation for tax recovery

With the successful performance in attaining Rs 25 billion, a target set for the general sales tax (GST) on services for the year 2011-12, the Sindh Revenue Board (SRB) is likely to take over the excise and taxation department for the better tax recoveries, Pakistan Today has learnt.
The excise and taxation department has been collecting various taxes from the citizens under different heads, however, there were several complaints from general public. Besides, the tax recovery of the excise and taxation authorities was reportedly low regarding responsibilities it has been assigned for.
In this regard, the authorities at the SRB have started work how to manage the new likely responsibility of the excise and taxation department so that the recovery of taxes could be improved, well-placed sources told Pakistan Today.
Recently, a series of meetings were also held between the officials of the SRB and the excise and taxation department to finalise the matter. Initially the SRB will assist the excise and taxation officials for the working and later the whole tax collection mechanism will be done by the SRB itself, sources added. Presently, the E&T department is collecting levies on infrastructure cess, motor vehicle, excise enactments, professional tax, hotel tax, cotton fee, property tax, entertainment duty and immovable property tax.
Sindh Taxes, which the SRB would expectedly collect in the future are:
Infrastructure Cess: This Cess is levied and collected at 0.5% C & F value of a consignment on the movement of gooks entering the province from outside the country though air or sea.
Motor Vehicle Tax: Motor Vehicle Tax is levied on every motor vehicle registered in any district with Registration Fee. The annual Motor Vehicle Tax is levied under Sindh Motor Vehicle Taxation Act 1958 and Motor Vehicle Rules, 1959.
Excise Duty: The excise and taxation department controls the manufacturing and sale of following excisable articles:- intoxicating liquor (PMFL & Beer), rectified spirit, denatured spirit and methanol.
Professional Tax: This tax is levied under the Sindh Finance Act, 1964. The basis of this tax is to bring various categories of persons engaged in different trade, callings and professions.
Category 1 – Rs.150 per salaried person whose salary is taxable under Income Tax Law. Category 2 – All limited companies, modarbas, mutual funds and any other corporate body registered under Company Law.
Category 3 – importers and exporters licence holder/owners of industry/factory and commercial establishments, contractor, suppliers, wholesaler, stockest, medical practitioner, architect, accountant, car dealer, real estate, agencies etc; (which should be on partnership or proprietorship). Category 4 – Rs 500 per annum on the establishments which are not income tax assesses. Category 5 – Rs 2500 per annum on all petrol pumps/CNG filing stations.
Hotel Tax: Hotel tax is levied and collected under Sindh Finance Act, 1977. Hotel Tax is collected on advalorem basis at 7.5% of room rent per lodging unit per day at the occupancy ratio of 80%. Every hotel management is required to furnish the particulars of their hotels on Declaration on Form H.T-I. The district excise and taxation officer assess the hotel on the basis of particulars declared on HT-I Form as well as Inspection Report and issues challans for payment of Hotel Tax.
The assessed tax amount of the year is collected in 12 equal monthly installments before 5th of each month. Any aggrieved may file an appeal before the director within 30 days against the assessment order of the district excise and taxation officer. The powers of revision are with director general, excise & taxation.
Property tax (devolved to the city district governments through SLGO 2001): Property tax is levied and collected under Sindh Urban Immovable Property. A uniform rate of tax for all categories is 20% of the annual rental value (ARV) w.e.from 1.7.2001.
The tax is levied on lands and buildings situated in Urban Areas declared as Rating Areas by the Government. More than 80% Property Tax is collected in 22 Divisions of Karachi and remaining from 41 rating areas of Interior Sindh. Gross Annual Rental Value (GARV) of lands and buildings is the basis of property tax.
Some 10% maintenance allowance and certain rebates are allowed on the basis of location, category and age period of construction in annual value. The properties up to 120 Sq Yds and 600 Sq Ft flats are exempted. There is additional rebate to widows, minor orphans, disable persons and retired government servants.
Entertainment duty (devolved to the district governments through SLGO 2001). Entertainment duty is levied and collected under Sindh Entertainment Duty Act, 1958. Entertainment duty is levied on entertainment places like cinemas, amusements parks, varity programmes and sports. Presently no duty is being collected from cinemas.