Karachi, PAC objects to FBR's deduction of billions rupees in at-source withholding tax on the bank transactions of Sindh's autonomous bodies, decides to take up matter with the Centre.
Imran
Karachi, PAC objects to FBR's deduction of billions rupees in at-source withholding tax on the bank transactions of Sindh's autonomous bodies, decides to take up matter with the Centre.
Public Accounts Committee (PAC) of the Sindh Assembly has raised strong objections to the deduction of billions of rupees in at-source withholding tax by the Federal Board of Revenue (FBR) on bank transactions of autonomous bodies and authorities of the Sindh government. Expressing serious concern over the issue, committee decided to write to the Sindh Chief Minister and the Chief Secretary, urging them to take up the matter with the federal government and the FBR.
This decision was taken at a meeting of the PAC chaired by Chairman Nisar Ahmed Khuhro, which reviewed audit paras of the Department of Human Settlement Spacial Development and Social housing for the financial years 2024 and 2025. The meeting was attended by Secretary Athar Hussain Mirani and other relevant officials.
Audit observed that bank has deducted Rs125 million in at-source withholding tax from the department's bank transactions on behalf of the FBR. It further pointed out that the department had failed to obtain a Free Tax Number (FTN), resulting in an unnecessary financial burden on the public exchequer.
Responding to the audit observations, the department's secretary informed the committee that banks were deducting withholding tax at source and depositing it with the FBR.
He said the department had repeatedly approached the FBR for the issuance of a Free Tax Number, but despite several written requests, the FBR had neither issued the number nor granted the department exemption from withholding tax.
Director General Audit informed the committee that government departments are normally issued Free Tax Numbers, making them exempt from at-source withholding tax deductions on bank transactions.
secretary further stated that the FBR had not issued Free Tax Numbers to any of the Sindh government's autonomous bodies and authorities, resulting in continued withholding tax deductions from their bank transactions.
Speaking on the occasion, PAC Chairman Nisar Ahmed Khuhro said that if other government departments were exempt from such deductions through Free Tax Numbers, the same facility should also be extended to all autonomous bodies and authorities of the Sindh government.
He said the FBR was effectively collecting billions of rupees from Sindh through at-source withholding tax deductions on bank transactions of autonomous institutions, describing the practice as an unjustified recovery.
He termed the matter a serious concern and said the committee had strong reservations over it.
The PAC decided to formally write to the Sindh Chief Minister and the Chief Secretary, requesting them to take up the issue with the federal government and the FBR. The committee also directed the Director General Audit Sindh to prepare a draft letter in this regard.
Larkana Special Economic Zone
The PAC also expressed strong displeasure over delays in the development of the 191-acre Larkana Special Economic Zone.
Chairman Nisar Ahmed Khuhro criticized the Industries Department for failing to conduct balloting for industrial plots, facilitate the establishment of industrial units and ensure the provision of basic infrastructure, including a 17-kilometre gas pipeline and water supply.
committee sought a comprehensive report from the Industries Department within one week and also decided to write to the Managing Director of Sui Southern Gas Company (SSGC) seeking details about the delay in the gas pipeline project.
While reviewing audit observations relating to the Industries Department, Khuhro asked officials to brief the committee on progress regarding the provision of gas and water to the Larkana special economic zone and the allotment of industrial plots.
Managing Director of SITE informed the committee that 27 applications had been received for industrial plots in the Larkana Special Economic Zone, of which 19 had been approved.
Industries Secretary Shadia Jaffar informed the committee that work on the 17-kilometre gas pipeline, which had remained suspended, had now resumed in coordination with Sui Southern Gas Company and would connect the economic zone to the gas network.
PAC chairman directed officials to obtain detailed information from the Managing Director of SSGC regarding the current status of the gas pipeline project and its expected completion timeline.
committee also directed the Industries Department to submit a comprehensive report on the Larkana Special Economic Zone within one week./
