Barbs fly in Sindh PA over sales tax legislation

Source: Published in Business & Economy on Tuesday, February 16, 2016

KARACHI: The Sindh Sales Tax on Services (Amendment) Bill, 2015, on Monday revived the acrimony between the treasury and opposition benches in the Sindh Assembly over levy of services tax on renting out immovable property for commercial purposes before it was passed by a majority vote amid slogans of “No, No” and “Go corruption, go” by Muttahida Qaumi Movement lawmakers.

The uproar and recriminations, however, overshadowed the consensus they had earlier reached on The Hindus Marriage Bill, 2016, that the provincial assembly passed unanimously.

After the passage of both bills, Speaker Agha Siraj Durrani called it a day at 4pm to meet on Tuesday at 10am.

During the discussion on the sales tax amendment bill, leader of the opposition Khwaja Izhar-ul-Hassan, and senior ministers Nisar Ahmad Khuhro and Syed Murad Ali Shah exchanged harsh remarks.

While piloting the bill, Senior Minister for Parliamentary Affairs Nisar Ahmad Khuhro informed the house that the bill was aimed at removing legal lacuna to avoid delay and litigations by replacing the words “in relation to” with the word “by”.

MQM parliamentary party leader Syed Sardar Ahmad said that his party made tremendous efforts to get the powers of collection of sales tax to the provinces which could not be materialised before the induction of the PPP-led government and its credit must be given to former president Asif Ali Zardari for devolving the powers to the provinces. However, he opposed the imposition of tax on renting out house or any other immovable property.

Mr Ahmad said that 99 per cent of the sales tax was being collected from Karachi, Hyderabad and Sukkur. As almost 85 per cent of all tax collection came from urban areas, imposition of further tax on rents of immovable property would amount to double taxation, he argued.

Senior Minister for Finance Syed Murad Ali Shah said the amendment bill was not aimed at imposing any new tax. He said only legal lacuna was being removed.

He said it was a military dictator who had imposed the sales tax in 2002 and Sindh Governor Ishratul Ibad had given the right of collection of the tax to the federal government. “This right [of tax collection] was denied to the provinces and the credit goes to the PPP that gave rights to collect the tax to the provinces.

Mr Hassan said urban areas were being overburdened with taxes. During almost seven years of rule, the PPP-led government claimed to have spent Rs900 billion on development, but not a single mega project was implemented anywhere in the province. “Where has this money gone?” he asked.

Mr Khuhro interrupted him and argued that being the leader of the opposition, he should not show any prejudice in his speech. Mr Hassan responded by saying he was not talking prejudice but pleading the case of Larkana, Karachi and other cities of Sindh. “We are only showing you the mirror but you are getting angry,” he said. There were a number of suo motu actions against the Sindh government as its performance was before the court of law, he added.

The senior minister drew the attention of the speaker by shouting “objection, objection” during the speech of the leader of the opposition. When the MQM was in power, it failed to get fair NFC award for Sindh, he said. It was former president Asif Ali Zradari who not only announced the NFC award according to the satisfaction of the provinces but also gave the right of collection of sales tax to the provinces, said the finance minister. “This role of the PPP must be acknowledged,” he added.

Mr Hassan said his party would not take credit for corruption of the PPP. “I am the leader of opposition of the most literate political party of Pakistan. Had I indulged in opposition like you, it would be difficult for you to survive,” he said.

Amid the recriminations, the chair asked the senior minister to read out the bill clause by clause that continued amidst slogans of “No, No and “No Corruption, No” until the third reading after which the bill was finally passed by a majority vote. 

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