Karachi, The Sindh Board of Revenue has faced a significant revenue shortfall, collecting only Rs48,526 million against a target of Rs100,640 million over the past three years, leading the Sindh Chief Minister to call for immediate improvements in the system of deferred taxes and e-stamping. These directives were issued during a meeting at the Chief Minister’s House chaired by Syed Murad Ali Shah, focusing on ways to improve the efficiency of revenue collection and address the shortfall.
According to Chief Minister Sindh, the Board of Revenue (BOR) has to improve its tax collection system and take concrete steps to enhance its performance. During the current financial year, BOR had a target of Rs55,218 million, but the nine-month target was Rs41,414 million, out of which only 33.57% or Rs13,901 million was collected.
The meeting was attended by Chief Secretary Asif Haider Shah, Principal Secretary to Chief Minister Agha Wasif, Secretary Finance Fayaz Jatoi, Member Board of Revenue Abbas Baloch, and others. The Finance Secretary highlighted that the target for water rate recovery in 2022-23 was Rs805.309 million, but only 9.2% or Rs74.540 million was collected. The Sindh Irrigation Drainage Authority (SIDA) was responsible for collecting from 2,173 out of 6,090 villages, while the Revenue Department collected from the remaining 3,917 villages, amassing Rs74.540 million.
Chief Minister Murad Ali Shah expressed concern over the shortfalls and proposed that manual crop inspection, assessment, and collection procedures be digitized. He also pointed out that the target for Agricultural Income Tax (AIT) for nine months was Rs2,723 million, with BOR achieving only 44.82% or Rs1,220 million. Stamp Duty, with a target of Rs36,787 million, had a 33.24% collection rate, amounting to Rs12,229 million.
Shah criticized the high exemption limit for AIT at 1.2 million and suggested bringing it in line with the Federal Board of Revenue’s limit of 0.4 million. He also recommended extending the restriction on AIT assessment to six years, compared to the current two-year limit. The Chief Minister cited the impact of FBR taxes on immovable property transactions, which led to reduced stamp duty collection. Taxes imposed on property transactions, such as 3% on filer and 10.5% on non-filer buyers, were cited as contributing factors to the shortfall.
The meeting discussed improvements to the e-stamping system, with National Bank operating 142 branches that issue e-stamps and Sindh Bank adding 100 branches. The Bank of Punjab is also set to issue e-stamps, pending State Bank approval.
Murad Ali Shah instructed the Chief Secretary to call a meeting to review the BOR’s tax collection processes and address any shortcomings. He also directed the SMBR to submit proposals for revising old tax rates and reinstating canceled taxes for approval. The Chief Minister noted that the registration fee for transferring immovable property, abolished in 2020, could be reviewed along with other canceled taxes to address revenue shortfalls.