KARACHI - The Sindh Assembly on Saturday passed a Sales Tax on Services (Amendment) Bill 2011, getting powers of tax collection from banking and insurance companies, contractors of buildings and other schemes as well as seaport and airport operators.

The bill moved by Law Minister Muhammad Ayaz Soomro was aimed at getting powers from the federal government to collect taxes on services.

According to the bill, the services provided or rendered by the non-banking finance companies and other financial institutions, port operators, airport operators, airport ground service providers and terminal operators and other services have been brought in the provincial tax net through the proposed amendment.

Besides, services provided by insurance companies including reinsurance, financial leasing, commodity equipment leasing, hire purchasing leasing as well as services provided or rendered in respect of Modaraba and Musharika financing (Islamic banking) also included in the provincial tax net.

However, other services of contractor of building including water supply, gas supply and sanitary works, electrical and mechanical works including air-conditioning and multi-disciplinary works and other services would be a part of provincial tax net. The rate of tax collection would remain the same of 16 percent, which was earlier being collected by the federal government.

Speaking on the objective of the amendment of bill, the law minister said that more services, which were earlier under tax net of the Federal Board Revenue, now have been added in the tax net of Sindh province and would be collected through the Sindh Revenue Board. So far, the Sindh Revenue Board has collected Rs11.5 billion taxes during the six months of current fiscal year 2011-12, against the Rs6 billion received to the Sindh province from Federal Government under same head.

He said that Sindh would improve its tax net, hoping that more tax collection to be received under this head, which will be spent on the development schemes. He further said at least 3,300 taxpayers had been brought in the tax net under sales tax on services. MQM’s parliamentary leader Syed Sardar Ahmed also praised the efforts of the SRB for tax collection and said that the then Sindh governor in 2001 through an ordinance gave the authority to the federal government for collection of sales tax. He also praised the efforts of Sindh Chief Minister Syed Qaim Ali Shah for getting the collection powers of GST back. He said that no complaint of harassment had been received against the Sindh Revenue Board so far which is commendable. He clarified that the bill was not for new tax, but taxes which were already being collected by the federal government, now would be collected by the province. After speeches on general principle of bill, the House passed unanimously. The law minister urged the chair to defer the consideration of another bill, establishment of office of ombudsman for the province (amendment) bill till Thursday, as according to him, the coalition partner MQM has suggested further amendments in the bill, which sent to the chief minister for approval. 

Meanwhile, senior Minister for Education Pir Mazharul Haq said that the establishment was hatching conspiracies against the elected government, which would be foiled. Mrs Humera Alwani, on point of order, staged protest against police action against PPP workers from Lyari.