SRB to provide tax relief to Corona affected sectors

Khurram Ijaz Vice President FPCCI

While appreciating the performance of the Sindh Revenue Mr. Khurram Ijaz Vice President of the Federation of Pakistan Chambers of Commerce and Industry stated that the pandemic COVID-19 has badly affected trade and industry, while recent urban flooding has damaged inventory and markets that need support from both federal and provincial government to restore economic and business activities.

During the meeting with Chairman SRB Mr. Khalid Mehmood and his team who visited FPCCI including, the FPCCI vice president applaud the achievement of more than 16% growth in tax collection reaching to Rs.10.429 billion however, he also raised some issues being faced by sectors rendering services.  He said that multiplicity of sales tax on services by provinces has drastically reduced the growth of some sectors. Relief package should be extended to service providers which is badly affected due to COVID-19 outbreak. It was also proposed to inter-link customs house agent’s license number with NTN and clearing agents not to be treated as shipping agents. Sales tax on rental income is not a service like brokerage etc. therefore may not be treated as sales tax on service. IT industry is being taxed at 13% which is higher side it should be revised to 2-5 percent to ensure growth of this sector.

There is no clear cut definition of software available in SRB while 80% sale of software is subscription based and there is no taxation of SRB in this respect. Therefore, there is a need to define the taxation in this sector with reference to definition of software. SRB is imposing sales tax on service by security agencies and security guard salary as well as hence the sector is exposed to double taxation that is the sector is paying income tax and sales tax on services, there is a need to review this situation of double taxation. Similarly the interpretation of SRB on the issue of Hajj and Umrah and religious journey of Ziarat which are being considered under the definition of Hajj & Umrah and need to be reviewed.

While responding to the issues and problems raised by participants from different sectors, the Chairman SRB informed that our target is to increase 27 percent revenue collection. He told that during COVID-19 period SRB did its best to provide relief and relaxation to the surviving businesses.

Mr. Zubair Baweja, Vice President while speaking in the meeting said that there are still untapped areas for revenue enhancement. He said that SRB under the Chairmanship of Khalid Mehmood has achieved various milestones. He further proposed some measures for revenue enhancement including digitalization of land record, automation, provincial taxpayer’s directory, census of service sectors, and elimination of duplicity and multiplicity in tax collection by various organizations and departments.

The meeting was attended by a large number of high profile businessmen including Mr. Muhammad Ali Quaid, VP FPCCI Mr. Saqib Fayyaz Magoon and Mr. Shabbir Mansha EC Member FPCCI, Mian Zahid Hussain, Mian Shaukat Ahmed former SVP, Chairman and members of leading associations and chambers belonging to different services sectors including Travel & Tour, Security, Overseas employment generation, ICT etc. The SRB Chairman also brings the SRB team including Mr. Abdul Majid Yousfani Member IT SRB, Syed Mushtaq Kazmi, Advisor Tax Policy SRB, Mr. Masood Jhangir Member Operations SRB, Ms. Mona Mehfooz, Commissioner SRB for immediate response on issues.

The meeting was concluded with the presentation of FPCCI shield to the Chairman SRB.

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