Collection of sales tax on goods should be devolved to provinces: Saleem Mandviwalla

Karachi, August 17, 2015 (PPI-OT): The second meeting of working group of 9th NFC Award held in Karachi on Monday to discuss Evolution of tax collection frame work in Pakistan and the devolved verses integrated tax structure in Pakistan. The meeting was chaired by Senator Saleem Mandviwalla, Member NFC Sindh, Finance Minister of Sindh Murad Ali Shah, Finance Minister KPK Syed Muzaffar Hussain Shajra, Qaiser Bengali, Member NFC Balochistan and Chairman Punjab and Sindh Revenue Authorities.

Senator Saleem Mandviwalla presented the report of 2nd working group and said that the group has prepared its report on Evaluation of Federal and Provincial tax collection system; Look into the best International practices and benchmarking. Study the pros and cons of integrated vs. devolved tax collection mechanism. It has Evolve conclusions and suggests recommendations.

While briefing the meeting on the report, Senator Saleem Mandviwalla elaborates that the working group has proposed that collection of sales tax on goods should be devolved to provinces. Each province transfers the collected amount to federal government, which in turn be distributed as per the spirit of the NFC Award. In order to incentivize collection, NFC works out an agreed province-wise projected amount of sales tax on goods.

Mandviwalla said that a suggestion to incentivize provincial collection is made on the basis of the amount of collection on sales tax on goods in excess of its projected estimates for respective provincial governments for its retention as reward for improved tax collection. Balochistan and KPK supported the demand of Sindh to collect sales on goods by the provinces and were of the view that it would help to generate more revenue.

Senator Mandviwalla criticizes the federal government by delaying the 9th NFC Award and said that the meeting of working group has been cancelled due to non-serious attitude of Federal Government. He rejected the decision of granting one year extension to Balochistan in 8th NFC award demanded federal government to call an urgent meeting on this important issue and that decision must be withdrawn.

For more information, contact:
Naila Bashir,
Media Coordinator,
Senator Saleem Mandviwala
Chairman Senate Standing Committee on Finance
Tel: +92-332-5299183