Phone tax ban hampers sales tax collection: SRB chairman

Phone tax ban hampers sales tax collection: SRB chairman

KARACHI – The imposition of restrictions on sales tax collection for telephone services by the Supreme Court of Pakistan has had a detrimental impact on overall revenue collection, as stated by Khalid Mahmood, Chairman of the Sindh Revenue Board (SRB).

He addressed this issue during a meeting with members of the Karachi Chamber of Commerce and Industry (KCCI).

Mr. Mahmood pointed out that there has been no sales tax collection on phone services for the past six months. During the initial half of the current fiscal year, the SRB managed to collect Rs44.6 billion in sales tax, marking a 14 percent increase compared to the revenue collected during the same period in the previous fiscal year. However, he emphasized that if the revenue from phone services were included in this collection, the growth would be even more substantial at 21 percent.

The Chairman of the SRB noted that the board currently has around 29,000 registered taxpayers. In the previous fiscal year, the SRB managed to collect a total of Rs100 billion. For the current year, the collection target has been set at Rs120 billion, reflecting the authority’s commitment to increasing revenue generation.

During the meeting, Siraj Kassem Teli, Chairman of the Businessmen Group (BMG), raised questions regarding the utilization of the revenue collected by the provincial government. He emphasized the importance of transparency and accountability in public finances, urging the government to provide a detailed breakdown of how the funds have been spent. Additionally, Mr. Teli called for an explanation regarding the contribution of Karachi, one of the major economic hubs of Pakistan, to the overall revenue.

The imposition of restrictions on the collection of sales tax for telephone services by the Supreme Court has raised concerns among business and industry leaders, as it impacts the government’s ability to generate revenue. The decision to exclude this source of revenue for the past six months has led to a revenue gap that needs to be addressed to meet the fiscal targets set for the current year.

It is crucial for the government to provide a clear and comprehensive account of how the collected revenue has been utilized, ensuring transparency in financial matters. Questions about the allocation of funds and the contribution of major cities like Karachi are valid concerns that require satisfactory answers to maintain public trust and foster economic growth.

The current situation underscores the need for a balanced approach that addresses the revenue requirements of the government while ensuring that the burden of taxation is distributed fairly and transparently. As discussions between the government, business leaders, and relevant authorities continue, it is hoped that a solution can be reached that aligns with the interests of all stakeholders and supports Pakistan’s economic development.