KARACHI: Chief Minister Sindh Syed Murad Ali Shah has refused to collect taxes for Federal Board of Revenue (FBR) under Income Tax Ordinance 2001, ARY NEWS reported on Monday.
The excise department of the Sindh government collects around Rs 8 billion in terms of taxes for the federal government. The amount is collected from the registration of vehicles and the transfer of vehicles’ ownership.
The provincial motor registration authority receives these taxes from the registration of 800 CC to 1300 CC vehicles. The provinces were directed by the federal authorities to collect these taxes and submit them to the FBR.
Shedding light on the matter, Secretary Sindh Excise department Abdul Haleem Shaikh said that they used to collect these taxes voluntarily to submit it with the federal authorities. He, however, said that constitutionally, they were not bound to collect it.
We will not be receiving this tax after fresh directives from the chief minister Sindh, he said.
It is pertinent to mention here that Sindh government on February 06 expressed its resentment over the deduction of eight billion rupees by the Federal Board of Revenue (FBR) from the accounts of the provincial excise department.
The provincial government has decided to bring back the money and raise the matter in the provincial cabinet.
Chief Minister Sindh Syed Murad Ali Shah while presiding over a meeting over deductions today said that the FBR has made these deductions of Rs eight billion from excise and taxation department and if these funds are not returned then the province would halt tax collection for the federal government.
“The FBR should open a separate counter for collection of withholding tax in the provincial excise department,” he said.
He said that the province collects withholding tax on behalf of the federal government for vehicles’ registration purposes and only charges two percent of the amount for extending its services and submit remaining to the FBR account.