Sindh govt warns to halt tax collection for Centre over FBR deductions

KARACHI: Sindh government on Thursday expressed its resentment over deduction of eight billion rupees by Federal Board of Revenue (FBR) from the accounts of provincial excise department, ARY NEWS reported.

The provincial government has decided to bring back the money and raise the matter in the provincial cabinet.

Chief Minister Sindh Syed Murad Ali Shah while presiding over a meeting over deductions today said that the FBR has made these deductions of Rs eight billion from excise and taxation department and if these funds are not returned then the province would halt tax collection for the federal government.

“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 purpose and only charges two percent of the amount for extending its services and submit remaining to the FBR account.

In April 2018, Chief Minister Syed Murad Ali Shah said that the provincial government was facing frequent arbitrary and unauthorised deductions by Federal Board of Revenue (FBR) through State Bank of Pakistan in connection to withholding and sales tax on goods from the Provincial Consolidated Fund (PCF).

The chief minister, while presiding over a meeting to review the deductions, decided to write a letter to the prime minister by tomorrow requesting to direct the Ministry of Finance to refund the amount of Rs7.054 billion to Sindh government.

CM Sindh said he had taken up the matter in the Council of Common Interests (CCI) that FBR has illegally drawn the money from PCF in contravention of the constitution. He noted that from 2014-15 to 2017-18 FBR has overall deducted Rs9.831 billion, and the amount must be refunded to the Sindh government.