KARACHI: Sindh government on Saturday presented a Rs869.12 billion provincial budget for fiscal year 2016-2017. The new budget contain expenditure as well as income approximately 15 per cent more as compared to fiscal year 2015-16.
Finance Minister Syed Murad Ali Shah presented the budget in the Sindh Assembly amid strong protest by opposition parties mainly the MQM. He announced 11% increase in allocation for the education sector a huge Rs 150.bln while Rs 55.bln has been set aside for health.
The aid of minorities has been increased by 200% while combined budget for Sindh Home Department and the police has been suggested to be Rs 70.bln.
A special package of Rs10bn has been set aside for Karachi in next year’s budgetary proposal. Karachi will get 100 MW from Nooriabad power plant with public-private partnership project worth Rs 13 billion.
Syed Murad Ali Shah announced 50,000 new jobs in education and home department. 10 thousands new policemen and women will be appointed in Sindh, he announced.
The provincial government will spend 36% of its annual budget on development sector. The estimated deficit in the provincial budget for upcoming financial year would be between Rs 14 billion.
Murad Ali Shah said in his budget speech that total revenue expenditure is estimated to grow by 1.8 percent to Rs 572.76 billion in 2016-17. He complained that federal government still has not given Rs. 112 billion to Sindh during outgoing fiscal year as announced by the federal finance minister Ishaq Dar.
Sindh Finance Minister also revealed that federal government took 3 years to approve sovereign guarantee for Thar coal project.
Sindh government has increased development budget by Rs50 billion. 10% increase in salaries and ad hoc allowances has been merged into basic pay he said .
1500 agricultural equipments will be distributed among the farmers at half price. Nawabshah, Sanghar road will be constructed with Rs2.9 billion.
The Finance Minister also announced an increase in grant for SIUT from Rs 3 to 4 billion.
Provincial budget focuses on revenue generation, employment generation, agriculture development and development of rural as well as urban areas.
The budget also proposes a number of new taxes against which MQM kept protesting during the budget speech.
The Sindh government has announced a 10 percent increase in the Infrastructure cess, which is levied for services rendered in respect of development and maintenance of infrastructure, on the goods entering or leaving the province through air or sea.
According to Sindh Finance Bill 2016, cess at the rate of 1.10 percent of the total value of goods as assessed by Customs authorities would be collected on any consignment weighing up to 1250 kilograms.
On consignment weighing between 1250 kilograms to 2030 kilograms moving through the province, cess at the rate of 1.11 percent of total value of goods would be collected.
Levy of 1.12 percent would be collected on consignments weighing between 2030 kilograms to 4060 kilograms. Rate of cess is 1.13 percent on consignments weighing between 4060 kilograms to 8120 kilograms. Rate of cess is 1.14 percent on consignments weighing between 8120 kilograms to 16000 kilograms.
Levy at the rate of 1.15 percent of total value of goods as assessed by the Customs authorities would be collected on consignments weighing more than 16000 kilograms passing through the province.
In addition to the rates notified above, one paisa per kilometer would also be collected on goods upon entering in and using the infrastructure of the province and distance covered within the province.
The budget envisages over 24 percent increase in its sales tax on services collection for the year 2016-17 to Rs76.012 billion, which the government intends to collect by streamlining tax rates and brining new sectors in the ambit of sales tax on services.
Sindh government has proposed that the standard rate of Sindh sales tax be reduced to 13 percent for the year 2016-17 which is lowest when compared with other three provinces while it is 17 per cent at the federal level.
According to Sindh Finance Bill 2016, sales tax at the statutory rate of 13 percent is also imposed on chartered flight services within Sindh or originating from any airfield in sindh.
Moreover, sales tax would also be applicable on public relations services, cosmetic/plastic/transplantation surgery, supply chain management or distribution services.
Sindh government has also brought visa processing services within the ambit of sales tax. These include advisory or consultancy services for migration or visa application filing services.
Moreover, debt collection services and other debt recovery services rendered by certain agencies would be subject to statutory rate of sales tax.