KARACHI: Sindh Chief Minister Syed Murad Ali Shah was informed on Saturday that the two important revenue collecting arms of the provincial government — the excise and taxation department and Board of Revenue — had failed to meet their targets during the first nine months of the current financial year.

CM Shah chaired two separate meetings of the excise and taxations department and the BoR and was visibly irked when officials informed him about the combined shortfall of over Rs46 billion in revenue collection.

Apparently, both the departments had missed their tax collection targets during the six-month rule of the caretaker government whose only responsibility was to hold the general election. The caretaker government was formed in August 2023 when Mr Shah had left the office of the CM. He resumed the same responsibility again following after his election as the leader of the house in March this year.

A press statement issued from the CM House said that the BoR had a target of Rs55.218bn tax collection during the current financial year and the nine-month target came to Rs41.414bn against which it recovered 33.57 per cent, or Rs13.901bn, showing a shortfall of Rs27.514bn.

Murad dissatisfied with performance of two organisations; asks to improve recovery collection

Similarly, the excise department also could not meet its target of Rs107.455bn showing a shortfall of Rs19.977bn as it collected Rs87.487bn during the financial year 2023-24.

The overall performance of the two tax collection arms during the past three years has been unsatisfactory as it continued to fail in achieving its recovery targets.

While government official claimed that the recovery targets of the BoR and excise department were not achieved due to abolishment and devolution of some taxes to the local government, insiders said that the rampant corruption and leakage in the revenue collection system in the two tax collection arms of the provincial government were the main cause of shortfall in revenue collection.

The press statement said that the meeting was told that the BoR during the last three years — 2020-21 to 2022-23 — was given a revenue recovery target of Rs100.640bn against which it could recover Rs48.526bn, showing a shortfall of Rs52.114bn.

The CM directed the BoR to propose revival of abolished taxes and improve e-stamping regime so that recoveries could be improved.

Excise Minister Sharjeel Inam Memon, Chief Secretary Asif Hyder Shah, Senior Member BoR Baqaullah Unar, Finance Secretary Fayaz Jatoi and others attended the meeting.

Presiding over the meeting of the excise and taxation department, the chief minister found there was a shortfall of Rs19.77bn in their revenue recoveries during the nine months of the current financial year 2023-24.

He expressed his disappointment and directed the excise department to focus on improving their recoveries. He also advised them to explore new taxation regimes, improve the old tax rates, and concentrate on professional tax and provincial excise.

The taxes and fees included Professional Tax, Provincial Excise Duty, Motor Vehicles Tax, Cotton Fee, Infrastructure Cess, Entertainment Duty, and others.

It is worth mentioning that the property tax has been devolved to local councils.

Published in Dawn, April 21st, 2024