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Sindh resumes withholding tax collection on registration of vehicles

Provincial cabinet approved allotment of land to SSGC

Reporting | - Posted: Oct 1, 2020 | Last Updated: 4 weeks ago
Posted: Oct 1, 2020 | Last Updated: 4 weeks ago
Sindh resumes withholding tax collection on registration of vehicles

Photo: File

The Sindh government, on behalf of the Federal government, has decided to resume collection of withholding tax on registration of vehicles from October 1.

The announcement was made by Sindh Chief Minister Murad Ali Shah at a cabinet meeting at Chief Minister House on Wednesday.

He told the cabinet that the Federal Board of Revenue had declared the Excise and Taxation Department as the withholding tax collecting agent without the consent of the provincial government.

“The department used to collect withholding tax on registration of vehicles on behalf of the FBR,” he said, adding that in 2016 the FBR on an incorrect information deducted Rs5.427 billion from the account of the provincial government on account of withholding tax. 

The Sindh government took up the matter at the board but its authorities, instead of returning the deducted amount to the Sindh government, deducted another Rs421.328 million.

The Sindh government, therefore, decided to stop collecting withholding tax on behalf of the FBR on July 1, 2020. 

Shah said that he discussed the matter with Adviser to the Prime Minister on Finance Dr Hafeez Shaikh, who then intervened.

Following this, the board passed an order in which they admitted that the deduction of money from Sindh government’s account was based on incorrect information. The FBR shared it with the government along with a request to resume tax collection. 

The FBR also agreed on certain conditions such as returning the Rs5.427 billion at once and deciding on the case of the remaining Rs421.328 million pending in board.

Renewal of lease

The meeting also discussed the legal position of the renewal of old leases granted for construction purposes in Karachi.

The cabinet, after thorough discussion, said that there was a FBR valuation table for different localities/categories for the renewal of lease. The provincial government will charge a fixed 10% rate above the valuation table of the FBR.

Land allotment to SSGC

The Sindh cabinet, on the request of Sui Southern Gas Company, has also approved allotment of land to the company in Malir, Jamshoro and Thatta for to lay gas pipelines.

The cabinet approved the allotment of 5.8 acres in Deh Ghaghar, 10.27 acres in Dhabeji-I and II, and 0.18 acres in Dhabeji-I and II of District Malir.

An approval of the allotment of 18.22 acres land to SSGC in four dehs of Jamshoro district at a rate of Rs600,000. Similarly, allotment of 108.29 acres in seven Dehs of Thatta district at a rate of Rs400,000 and Rs700,000 (of different dehs) was also approved.

This allotment/ lease of land has been given to SSGC for a period of 99 years. 

The cabinet reiterated its stance that the provincial government would never accept re-gasified liquefied natural gas. Cabinet members said that residents of Sindh have the first and foremost right to natural gas being produced in the province. 

KSE attack

The home department requested the cabinet to approve compensation to the legal heirs of deceased and injured policemen, private security guards and civilians in the attack on the Karachi Stock Exchange on June 29, 2020. 

In the attack, three security guards had lost their lives. The chief minister had announced a job for legal heirs of the victims and Rs5 million to each martyred security guard’s family. Compensation of Rs500,000 each was already covered under the policy, whereas the remaining Rs4.5 million to each, totaling Rs13.5 million, was approved by the cabinet.

Three policemen were injured and their compensation of Rs1 million was approved by the cabinet. Similarly, seven policemen of RRF had participated in the operation against the terrorists and the cabinet approved a cash price of Rs500,000 for each.

The chief minister directed the finance secretary to release the amount within a week . 


The cabinet approved the establishment of the Sindh Institute of Music & Performing Art (SIMPA), Jamshoro.

The culture minister told the cabinet that theatre performances before partition were rich in Sindh but have now faded. He added that establishing the institute was to enable continuity of indigenous music for upcoming generations and was also in accordance with the UNESCO Convention for safeguarding intangible cultural heritage and to preserve and revive the diminished theatrical activities in the field of art.

The cabinet approved the act of SIMPA which has its own building in Jamshoro and other required infrastructure and instruments.  

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