The Sindh government led by Chief Minister Murad Ali Shah has refused to collect taxes for the Federal Board of Revenue (FBR) until it refunds Rs8 billion it has deducted from the provincial excise department’s acount, a private news channel reported on Monday.
According to the report, the Sindh Excise and Taxation Department collects around Rs8 billion in taxes for the federal government from the registration of vehicles of 800cc to 1300cc and transfer of vehicle ownership.
Sindh Excise Secretary Abdul Haleem Shaikh told the channel that they used to collect these taxes for the federal government voluntarily and there was no constitutional binding in this regard.
“After the Sindh CM’s directions we will not collect this tax,” he told the media outlet.
On Feb 6, the Sindh government had expressed its anguish over the deduction of Rs8 billion by the FBR from the accounts of the provincial excise department.
Chairing a meeting on Monday, Chief Minister Shah said that the province would stop collecting taxes for the federal government until FBR refunds the deducted money to the provincial excise department.
“The FBR should open a separate counter for collection of withholding tax in the provincial excise department,” he said.
He said that the province collects withholding tax on behalf of the federal government for vehicles’ registration purposes and only charges two per cent of the amount for extending its services and submits remaining to the FBR account.