[but as for you, · mr. khalid mahmood strongly believes in empowering team members and encouraging...

[ B U T A S F O R Y O U , O BELIEVERS,] NEVER SHALL YOU ATTAIN TO TRUE PIETY UNLESS YOU SPEND ON OTHERS OUT OF WHAT YOU CHERISH YOURSELVES; AND WHATEVER YOU SPEND - VERILY, GOD HAS FULL KNOWLEDGE THEREOF.

(AL-QURAN 3:92)

ContentsVision & Mission 05Values 06Collection 07Chairman’s Statement 08Members of the Board 10Organogram 12Introduction to SRB 13Revenue Spinners 19Expanding Taxpayer-base 37Our Partners in Progress 43IT Wing 47Survey & Development Wing 51Audit Wing 55HR Wing 57Sindh Institute of Fiscal Management 61Taxpayer Facilitation 65Acronyms 68

VisionTo achieve economic prosperity in Sindh and Pakistan.

MissionTo create an efficient provincial resource mobilization system which can fund economic prosperity of the province.

SUSTAINABLE REVENUE06

ValuesSRB’s values are based on its belief in responding to the needs of its stakeholders: Government of Sindh, taxpayers and employees.

Responsibil ityResponsibility is SRB’s core value and it is ingrained in all its policies and practices. SRB holds itself responsible towards all its stakeholders: Government of Sindh, taxpayers and its team members.

DiversitySRB promotes an open culture and celebrates diversity. This provides employees with an opportunity to collaborate and learn by supporting, recognizing and respecting contribution of others.

IntegritySRB and its team members are strongly committed to follow the highest standards of honesty, fairness and ethics.

InnovationSRB values proactive solutions and decision making. Employees are encouraged to share their ideas for continuous improvements.

Team WorkSRB creates an environment where all employees work with enthusiasm and achieve goals by enjoying individual and collective responsibilities. This helps maintain teamwork, loyalty, and a sense of belonging that ensures continuous success.

Cl ient SatisfactionSRB works to surpass clients’ expectations by better understanding their needs and offering solutions that contribute to their success. This also helps in earning clients’ respect, trust and building long-term relationships.

Annual Report 2018 07

Rs.

bill ion100

27%


The year 2017-18 has been significant in several respects. The organization met the target of 100 billion rupees, posting an increase of 27% year on year. This included collection of 8 billion rupees for Sindh Workers Welfare Fund (WWF) and Sindh Companies Profits (Workers’ Participation) Fund that SRB has been mandated to collect for the Sindh province.

Standard rate of sales tax has been maintained at 13 % during the year, which is the lowest in any tax domain in the country, whether federal or provincial. The collection effort has met challenges from the slow economic recovery, exacerbated by the impact of political transition in the last quarter of the year. It goes to the credit of SRB workforce that did not let up on this. Sindh Government’s consistent support and taxpayers’ trust played an equally vital role in witnessing a growth of 27%. Telecommunication, ports & terminal operators, banks, insurance, contract executions and franchise services remained major contributors. Sizeable growth was posted by other services including construction, business support, labor and manpower. Top 10 sectors contributed 57% of the total collection compared with 63% last year. Consistent effort is needed to tap the services hitherto escaping enforcement. The renewed emphasis by national and subnational tax domains on documented transactions is likely to ameliorate the task.

At SRB, we believe that enrichment of an organization’s human resource is a continuous process in order to enhance workers’ capacities and competitiveness in the present day working environment. SRB employees who had not been exposed to any formal training upon their induction were provided two-month training at IBA, Karachi. In view of growing manpower requirements of the organization, 40 new Assistant Commissioners were inducted through rigorous and competitive selection criteria, pre-eminently administered by IBA, Karachi. The new inductees were also exposed to two-month training at IBA, Karachi on micro and macroeconomics and fiscal policies, followed by training at Sindh Institute of Fiscal Management (SIFM).

With employees’ training – a perpetual need - in view, an in-house training facility, named as ‘Sindh Institute of Fiscal Management’ (SIFM) was established. SIFM caters to not only organization’s own training requirements, but others’ in the provincial government as well. In the long run, SIFM will also extend this facility to private sector including tax consultant firms with a view to providing stakeholders opportunity to improve their skillset. A three-day international training on VAT was organized for SRB officers at IBA, Karachi in September, 2017. International Bureau of Fiscal Documentation (IBFD) designed the course, conducted by three eminent international resource persons. The course was a great success affording

Chairman’s Statement


participants an access to the working and practices of top VAT economies and the ways they had addressed the policy and enforcement issues in their respective domains.

The Audit Wing got to its feet as an effective support unit to Operations, during the year. Workers with accounting and finance background were selected for placement in the Wing. Three training workshops focusing on the significance of audit and use of tools necessary to accomplish audit within the VAT-mode sale tax scheme were organized. World Bank lent its courtesy by funding and providing its international experts for the training.

SRB’s own board was revamped to comprise mostly full time members to ensure timely and improved decision making. Comprehensive health insurance policy was also introduced for the employees. Measures were taken to internally reorganize structure and reporting lines to further augment monitoring and controls, given organization’s expanding operations. For the first time, quarterly reports were introduced and placed at SRB’s website. Mindful of its socio-responsibility towards its workers, the management initiated measures to establish welfare foundation for SRB employees.

Sindh government took a policy decision to neither impose new taxes nor enhance

Khalid MahmoodChairman

the existing for the year 2018-19 providing a space to the businesses in tight economic conditions. The goodwill this decision envisaged apart, the target of 120 billion rupees set for the year 2018-19 becomes a daunting task given, in particular, the heightening challenge of litigation. SRB statute requires an annual report to be presented to the government for laying it before the provincial legislature. This effort meets the obligation, holding the optimism that Honorable legislators will guide this organization through their views and wisdom.

My appreciation goes to the colleagues who gave input and oversaw the contents of this report, besides the staff that worked hard to bring this report out. Syed Mushtaque Kazimi, Mr. Baqar Abbas Naqvi and Syed Ali Ahmad deserve special mention. Profound thanks are owed to Honorable Chief Minister Syed Murad Ali Shah, whose consistent support and leadership over the years, enabled SRB make the strides it did ever since its inception in 2011. Principal Secretary and the Chief Minister’s office are worthy of our deep appreciation for their continuous support. Thanks are also due to Finance and other Sindh government departments for their cooperation and assistance, during the year.

Mr. Khalid Mahmood is currently leading Sindh Revenue Board as Chairman. He has served Federal Government for more than three decades holding senior positions within and outside the country. Key positions held by Mr. Khalid Mahmood include: Managing Director of Overseas Employment Corporation; Member (Technical) Customs Appellate Tribunal; Member HQ and DG Intelligence & Investigation - FBR; Director, Trading Corporation of Pakistan; Collector Sales Tax & Federal Excise Tax; Chief (Customs) and Chief (Domestic Taxes) FBR; and as Pakistan’s Commercial Counselor in South Korea. He has kept himself engaged in various training programs to stay abreast with progressing managerial concepts. Mr. Khalid Mahmood strongly believes in empowering team members and encouraging educated youth to join public sector organizations.

Members of the Board

Syed Mushtaque Kazimi has worked with Government of Pakistan for around 40 years and is currently engaged with SRB as Senior Advisor (Tax Policy). In the field of taxation, he started his career as an officer of Pakistan Customs & Excise Service and served in Federal Board of Revenue in different senior positions including: Director General of Training and Research; Member (Sales Tax) and Member (Technical) in Customs, Excise & Sales Tax Appellate Tribunal and Collector of Customs at Karachi and Hyderabad. He has also served as taxation expert in international assignments in Zimbabwe in 1982 and Mongolia in 1994.

Mr. Khalid MahmoodChairman

Syed Mushtaque KazimiSenior Advisor (Tax Policy)



Dr. Noor Alam has been working for Government of Sindh since 1988 and has been a policy maker in different capacities. He has served Finance Department, Government of Sindh in various positions including: Deputy Secretary Finance; Research Economist; Additional Secretary Finance and Chief Economist. Currently, he is engaged as Senior Member – Audit at SRB along with additional charge of Special Secretary (Resources) in Finance Department.

Mr. Farooq Azam is serving SRB since February 2018 as Senior Member Legal. He possesses vast experience of working in various capacities in a number of departments of the Government of Sindh since 1988. He has served as Secretary, Special Secretary, Additional Secretary and Deputy Secretary in departments such as Finance, Planning & Development, Minorities Affairs, Food and Health. He has also been a member of the Chief Minister’s Inspection Team and Member Sindh Services Tribunal.

Mr. Baqar Naqvi joined Civil Service in 1989 and joined Government of Sindh in November, 1992. He began his career as Assistant Commissioner and was later promoted to the position of Deputy Secretary subsequently as Additional Secretary. Currently, he is serving as Member IT at SRB. He has served with several departments of Government of Sindh including Health, Education, Information Technology and Board of Revenue. Over the period of his service, he has gained good knowledge and experience in administrative and technological domains. He is an electrical engineer and holds a Master’s degree in Business Administration.

Dr. Noor AlamSenior Member (Audit)

Mr. Farooq Azam Memon Senior Member (Legal)

Mr. Baqar Abbas Naqvi Member (IT)


Organ izational Structure

MemberOperations

Member Legal

Member Audit

Member Admin

Member Information Technology

Call Center & TP Services

Legal Interpretation

Compliance S&D Finance Applications Advisor HR

Assessment & Refunds

Collection & Enforcement

Regional Office Setup

Objections & Appeals Audit

General Admin Systems

Procurement Specialist

Litigation & Courts Investigations HR Admin Network Advisor IT

RegionalOffices Setup

Policy Research

Corporate Planning


Advisor Training


RegionalOffices Setup SIFM

Chief- Internal Audit

ChairmanSenior Advisor Tax PolicySecretary

ProgramDirector

(Reforms)

introduction to srb



In pursuance of the provisions of Article 8 of the 7th NFC Award 2010, the Provincial Assembly of Sindh enacted Sindh Revenue Board Act, 2010 and established Sindh Revenue Board in 2011 which was entrusted with the task of administering and collecting Sales Tax on Services levied under Sindh Sales Tax on Services Act, 2011. Later, the Sindh Revenue Board (SRB) was also empowered to collect the contributions of SWWF and SWPF in terms of the provisions of the Sindh Workers Welfare Fund Act, 2014 and the Sindh Companies Profit (Workers’ Participation) Act, 2015.

Previously, the Sindh Sales Tax levied under the Sindh Sales Tax Ordinance, 2000 was collected by Federal Board of Revenue (FBR) from July 01, 2000 to June 30, 2011. Similarly, the Workers Welfare Fund and the Workers’ Profit Participation Fund in the province of Sindh were also collected by FBR until the said two laws came into operation.

About us

A Brief History of SRBIn the very first year of its inception, SRB was given an extremely challenging target of Rs. 25 billion for FY 2011-12 compared with collection of Rs. 3.26 billion made by FBR in FY 2010-11. This target was achieved by SRB and Rs. 25.1 billion was collected during the FY 2011-12. Over a period of seven years, the revenue targets increased at a cumulative average growth rate of 26% per annum and the target of Rs. 100 billion for FY 2017-18 was achieved with indefatigable efforts by its team. Thus, SRB continued the trend and has set an example of a revenue organization that has always successfully achieved its assigned targets.

Besides collecting Sales Tax on Services in the province, SRB also helps Government of Sindh (GOS) in matters related to fiscal and economic policies. The Tax Policy Wing of SRB regularly assists GOS in overall taxation policies for the province. The organization possess a strong IT team which helps in enforcing tax system by using modern techniques of information technology and has developed and deployed reliable automated systems for the collection and assessment of Sales Tax on Services. All systems, i.e. form registration to payment and return filing are done electronically.

SRB Staff attending 3-day training on Sales Tax/VAT, organized in coopertion with IBFD at IBA, Karachi


Sales Tax on Services is a Provincial subject being not included in the Federal Legislative List enumerated in the Fourth Schedule of the Constitution of the Islamic Republic of Pakistan. There is no ambiguity in this regard in view of Entry No. 49 of the said Federal Legislative List, as amended vide the Constitution (Fifth Amendment) Act, 1976, read with the Constitution (Eighteenth Amendment) Act, 2010.

Sindh Sales Tax on Services was levied under the Sindh Sales Tax Ordinance, 2000. However, the collection functions were entrusted to Federal Board of Revenue under the said Ordinance.

In view of Article 8 of the 7th NFC Award of 2010, the Provincial Assembly of Sindh legislated the Sindh Revenue Board Act, 2010. Later the said Assembly also legislated the Sindh Sales Tax on Services Act, 2011, which took effect from July 01, 2011, and repealed the Sindh Sales Tax Ordinance, 2000. The aforesaid two enactments of 2010 and 2011 entrusted the functions of collection of Sindh Sales Tax to the newly created Sindh Revenue Board with effect from July 01, 2011.

In today’s progressing economy, developing human capital and preparing a skilled workforce remains a top priority for any growing organization. Keeping this in view, Sindh Institute of Fiscal Management (SIFM), has been established under SRB’s tutelage.

The institute has been delegated with the task of providing training and enhancing capacities of SRB employees. The training facility is also available to all fiscal and revenue related organizations of the Government of Sindh extending the scope to the private sector as well in due course.

Tax Collection Sindh Institute of FiscalManagement

Our Mandate

Enhancing tax management skills of SRB employees at IBA, Karachi


In the wake of Article 8 of the 7th NFC Award of 2010, provinces were allowed to collect Sales Tax on Services. SRB was formed in 2010 and was assigned to collect this levy in the province of Sindh with effect from July, 2011. During short span of time, SRB has successfully increased the revenue collection figure from Rs. 3.2 billion for FY 2010-11 collected by FBR at 17% tax rate to Rs. 25.01 billion in FY 2011-12 at 16% tax rate which now stands at Rs. 100 billion for FY 2017-18, collected at 13% tax rate.

Besides 13% as standard rate, SRB also offers reduced rate on services like inter-city transportation and security services etc. Telecommunication services are charged at 19.5%.

Sindh Workers Welfare Fund (SWWF)

Sindh Government also entrusted SRB with the task to collect contributions under Sindh Workers Welfare Fund Act, 2014 and Sindh Companies Profits (Workers’ Participation) Act, 2015. SRB started the collection from December, 2015 and during seven months of FY 2015-16 collected 0.714 billion which increased to Rs. 2.5 billion in FY 2016-17 and Rs. 8 billion during FY 2017-18.

Our Footprint

Initially, physical presence of SRB was limited to Karachi - the economic hub of Pakistan. However, in order to increase effectiveness in revenue administration and collection, SRB extended its physical outreach by opening two regional offices, in Hyderabad and Sukkur respectively. The regional offices have further enhanced the tax base and contribution in overall revenue collection.

What We Collect

Sindh Sales Tax onServices (SSToS)

Tax Rate AnalysisThe statutory rate has been gradually reduced from 16% to 13% to better facilitate taxpayers and increase voluntary compliance. The reduction in rate has enabled SRB to maintain trust of registered taxpayers and also attract new taxpayers. In contrast with FBR and other provincial service tax authorities, Sindh Revenue Board has imposed the lowest service sales tax rate as detailed below:

S. No. Department Tax Rate

1 Federal Board of Revenue 17%

2 Punjab Revenue Authority 16%

3 Khyber Pakhtunkhwa Revenue Authority 15%

4 Baluchistan Revenue Authority 15%

5 Sindh Revenue Board 13%

Economic & Fiscal Review

Department SRB E&T BORCollection (Rs. bn) 100.29 61.15 15.55% Share 56% 34% 9%


Government of SindhRevenue Reciepts Contribution

FY 2017-18

E & T BOR SRB OTHERS

56%1% 34%

9%

The Government of Sindh raised the revenue target by 25% to Rs. 181 billion for FY 2017-18, up from Rs. 144 billion in the previous year. Of the total, the Sindh Revenue Board was assigned a target of Rs. 100 billion, constituting 55% of provincial revenue.

The contribution of SRB, Excise & Taxation and Board of Revenue in the collection for Government of Sindh in FY 2017-18 is shown in the following table and pie chart.

Pakistan’s economy recorded a growth of 5.8% for the FY 2017-18 and the total GDP stood at Rs. 12,392 billion. The services sector recorded a growth of 6.43%, while industrial and agriculture sectors grew by 5.8% and 3.81%, respectively.

All the six sub-sectors of service sector displayed growth in FY 2017-18:

i. Wholesale and Retail Trade - 7.5%ii. Transport Storage and Communication - 3.6%iii. Finance and Insurance - 6.1%iv. Housing Services - 4.0% v. General Government Services - 11.4% vi. Other Private Services - 6.1%

SRB - Top Contributor in Tax Receipts of Sindh

Sindh Revenue Board since its inception has been working consistently with a spirit of setting highest benchmark in revenue generation by collecting tax at the lowest provincial sales tax rate.


Growth in Revenue Collection over the Years SRB with its vision of strengthening the economy of Sindh and Pakistan has constantly shown growth in its tax collection over the years. The continuous

improvisations of tax policy in favor of taxpayers have made SRB successful in facilitating them and thereby strengthening the economy.

RupeesYear on Year Growth

+35%+26%

+17%

+25%

+28%

+27%

0102030405060708090

100110

2011-12

25Billion

2012-13

33.7Billion

2013-14

42.4Billion

2014-15

49.4Billion

2016-17

78.6Billion

2017-18

100Billion

2015-16

61.6Billion

revenue sp inners


In FY 2017-18, total revenue collection crossed the Rs. 100 billion mark and an increase of 27% was observed over the collection of FY 2016-17. A total of 87 services were taxed in FY 2017-18 under the Sindh Sales Tax Service Act, 2011.

As a normal practice of equitable taxation system, the tax collection of FY 2017-18 includes contributions from large and small taxpayers.

FY 2017-18 witnessed Telecommunication as the top tax contributor due to increased usage of 3G and 4G services. The revenue collected posted an increase of 45% in comparison with FY 2016-17, yielding a sum of Rs. 13 billion.

Revenue Sp inners

Major Revenue Sp inners

Rupees in million

S.No. Service Category FY 2016-17 FY 2017-18 Increase Over Previous Year

1 Telecommunication 9,093 13,226 45% 2 Ports, Airports & Terminal Operators 9,939 10,723 8% 3 Banks 6,131 7,557 23% 4 Insurance 7,942 6,044 -24% 5 Contract Execution 4,853 5,645 16% 6 Franchise 4,525 5,431 20% 7 Construction 3,132 3,215 3% 8 Technical, Scientific & Engineering Consultants 2,321 2,444 5% 9 Business Support Services 1,083 1,690 56% 10 Labor & Manpower Services 394 1,550 293% Total 49,413 57,525 16%

A sum of Rs. 10.7 billion was paid by Ports, Airports & Terminal Operators, making it stand out as the second highest contributor in FY 2017-18 with an increase in tax collection of 8% against FY 2016-17.

The third highest contribution in FY 2017-18 came from Banking Sector with tax payment of Rs. 7.6 billion, posting a rise of 23% against FY 2016-17. During the FY 2017-18, Business Support Services and Labor & Manpower Supply Services emerged as two top contributors in SRB’s revenue generation. Business Support Services showed an increase of 56% in FY 2017-18 over FY 2016-17. Labor & Manpower Supply Services demonstrated 293% growth in FY 2017-18 against FY 2016-17 yielding Rs. 1.55 billion.

The table shows tax paid by top 10 contributors in FY 2017-18 against FY 2016-17.



Rupees in million

The FY 2017-18 has witnessed a growth of 16% in the tax collected by top ten contributing sectors and 46% in the tax collected by other service sectors. In terms of contribution, top 10 sectors accounted for 57% of revenue in FY 2017-18 while other service sectors’ contribution stood at 43%. The growth posted by other

Growth Comparison & Contribution

FY 2016-17 FY 2017-18 FY 2017-18/ 2016-17

sectors has increased their contribution in revenue from 37% in FY 2016-17 to 43% in FY 2017-18 which demonstrates expansion of taxpayer-base and shift in reliance from top contributing sectors.

Category Total Collection Contribution % Total Collection Contribution % Growth%

Top 10 revenue 49,413 63% 57,525 57% 16% Spinners

Other Servicing 29,224 37% 42,765 43% 46% Sectors

Total 78,637 100% 100,290 100% 27.0%


Telecommunication Services has surpassed revenue collection of all other service sectors and regained its top position after a span of three years (FY 2014-15 to FY 2016-17). The successful implementation and operations of 3G and 4G has given a boost to tax collection from this sector. Telecommunication Service Sector includes companies that are involved in electronic communication via landlines, mobile and internet networks as defined under

Top 10 Contributing Sectors

Telecommun ication Servicesclause (u) of Pakistan Telecommunication (Reorganization) Act, 1996 and Wireless Telegraphy Act, 1933 (Act No. XVII of 1933).

The statutory tax rate for FY 2017-18 was revised back to 19.5% levied during FY 2011-12 to 2014-15 to harmonize the rate of levy with other provinces. The FY 2015-16 and 2016-17 experienced a reduction in rate i.e. 18% and 19%, respectively.

The table highlights the tax collection over the past seven years

Rupees in million

(Rs. in Million)

2,000

0

4,000

6,000

8,000

12,000

10,000

14,000

2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18

S.No. FY Collection Increase Over Previous Year

1 2011-12 8,691 - 2 2012-13 10,736 24% 3 2013-14 10,376 -3% 4 2014-15 6,365 -39% 5 2015-16 7,190 13% 6 2016-17 9,093 26% 7 2017-18 13,226 45% Total 65,677


Ports and Terminal Operators that contribute to SST revenue include Karachi International Container Terminal, Pakistan International Container Terminal and Qasim International Container Terminal, on-dock or off-dock terminals or persons carrying out similar activities, including cargo or baggage shed operators, licensed or appointed by the customs authorities at any customs port or station. The statutory tax rate on services rendered by Terminal Operators was 16% from FY 2011-12 to 2013-14, reduced to 15% and 14% during the FY 2014-15 and FY

Ports and Terminal Operators2015-16, respectively. The rate was further reduced to 13% in FY 2016-17.

The sector has been one of the consistent top taxpayers and has shown significant growth in tax payments every year. This year, the sector stood second highest with total collection of Rs. 10.7 billion and an increase of 8% in comparison to collection made in FY 2016-17. The table displays the growth trend since FY 2011-12 to present.


1 2011-12 3,425 - 2 2012-13 5,565 62% 3 2013-14 4,774 -17% 4 2014-15 5,929 24% 5 2015-16 8,211 39% 6 2016-17 9,939 21% 7 2017-18 10,723 8% Total 48,576

Rupees in million

(Rs. in Million)

2,000

0

4,000

6,000

8,000

12,000

10,000

2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18


Banking Services that are liable to SST under the Act, 2011, include all banking companies, cooperative financing societies, leasing companies, foreign exchange dealers, non-banking financial institutions, companies providing management services including fund and asset management services, and other persons dealing in any such services. Services pertaining to Umra and Hajj, banks' cheque books, musharika and modarba financing are exempt from Sales Tax on Services.

Banking ServicesThe statutory rate applied to banking service for the FY 2017-18 is 13%. The rate imposed in FY 2011-12 was 16% which was revised from FY 2013-14 to 2015-16 with annual cut of one percent. All banks are liable to file quarterly sales tax return statement beside monthly sales tax return.

A sum of Rs. 7.6 billion was collected in FY 2017-18 with a growth of 23% in contrast to FY 2016-17. The banking sector has been one of the top 10 tax paying sectors and has been growing impressively since 2011. The growth trend of banking services is as under:


1 2011-12 2,608 - 2 2012-13 3,157 21% 3 2013-14 3,956 25% 4 2014-15 4,736 20% 5 2015-16 6,261 32% 6 2016-17 6,131 -2% 7 2017-18 7,557 23% Total 34,406

Rupees in million

(Rs. in Million)

1,000

0

3,000

5,000

7,000

9,000

2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18


Insurance is defined in Clause (xxvii) of Section 2 of the Insurance Ordinance, 2000 (Ordinance No. XXXIX of 2000). FY 2017-18 faced a deficit of -24% over FY 2016-17. The previous year included an amount of Rs. 3.1 billion collected from Pakistan Reinsurance Company (PRC) as an arrear charged from FY 2011-12 to 2013-14. No reinsurance amount was collected in FY

Insurance Services2017-18 due to ongoing litigation over tax collection by PRC in Sindh High Court. Moreover, many foreign companies have wound-up or contracted their insurance business in Pakistan, which led to low collection in this sector.

The table depicts amount collected from this sector over the course of seven years.


1 2011-12 3,235 - 2 2012-13 4,226 30% 3 2013-14 4,498 6% 4 2014-15 4,588 2% 5 2015-16 4,784 4% 6 2016-17 7,942 66% 7 2017-18 6,044 -24% Total 35,317

Rupees in million

(Rs. in Million)

1,000

0

3,000

5,000

7,000

9,000

2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18


Contractual Execution Services are mentioned in Second Schedule to the Act, 2011, against tariff code 9809.0000 liable to SST with effect from July 1, 2011.

Contractual Execution of Workand Furn ishing-Suppl ies

The statutory sales tax rate applied on Contractual Execution Services is 13% which resulted in collection of Rs. 5.6 billion in FY 2017-18, demonstrating an increase of 16% in comparison to FY 2016-17. The table depicts the yearly growth trend of this sector.


1 2011-12 304 - 2 2012-13 459 51% 3 2013-14 954 108% 4 2014-15 3,195 235% 5 2015-16 4,928 54% 6 2016-17 4,853 -2% 7 2017-18 5,645 16% Total 20,338

Rupees in million

(Rs. in Million)

500

0

1500

3,000

4,500

6,000

2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18


Franchising is a license that a franchisee acquires to be able to have access to franchiser’s proprietary knowledge, processes, and trademarks in order to allow franchisee to sell a product or provide a service under the franchiser's name. The Second Schedule of the Act, 2011 describes franchise and its services in depth. The statutory tax rate was levied at reduced rate of 10% with condition that input tax will not be admissible.

Franchise ServicesThe total contribution made by Franchising Services in FY 2017-18 stands at Rs. 5.4 billion, marking an increase of 20% over FY 2016-17. The table demonstrates development of franchising sector over the years.


1 2011-12 521 - 2 2012-13 1,668 220% 3 2013-14 1,966 18% 4 2014-15 2,996 52% 5 2015-16 3,705 24% 6 2016-17 4,525 22% 7 2017-18 5,431 20% Total 20,812

Rupees in million

(Rs. in Million)

500

0

1500

3,000

4,500

6,000

2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18


Rupees in million

Construction Services that are charged at statutory rate of 13% in FY 2017-18 are mentioned in the Second Schedule of Act, 2011. The initial statutory rate applied in FY 2011-12 on this sector was 16% which was then reduced to 15% and 14% in the FY 2014-15 and 2015-16 respectively.

Construction ServicesA continuous growth has been observed in the revenue generation from construction sector over the years. In FY 2017-18, a growth of 3% over FY 2016-17 was witnessed and a sum of Rs. 3.2 billion billion was collected. The following figures represent the yearly growth trend of this sector.


1 2011-12 20 - 2 2012-13 73 265% 3 2013-14 512 601% 4 2014-15 1,166 128% 5 2015-16 2,157 85% 6 2016-17 3,132 45% 7 2017-18 3,215 3% Total 10,275

(Rs. in Million)

500

0

1500

2,500

3,500

2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18


Rupees in million

Technical, Scientific & Engineering Consultants defines persons rendering services as mentioned in Pakistan Engineering Council Act, 1975 (Act No. V of 1976) and Structural Engineer for Sindh Building Control Ordinance, 1979 (Sindh Ordinance No. V of 1979).

The taxation on this service category was imposed against tariff code 9815.5000 under the Second Schedule of Act, 2011 with effect from July 1, 2014. The

Techn ical, Scientific and Engineering Consultantsimposed statutory tax rate over the period of four years has been reduced from 15% to 13%. With an increase of 5% in collection made in FY 2016-17, SRB uplifted the collection from this sector to Rs. 2.4 billion. The revenue trends are displayed below:


1 2014-15 2,522 - 2 2015-16 1,896 -24% 3 2016-17 2,321 22% 4 2017-18 2,444 5% Total 9,183

(Rs. in Million)

500

0

1,000

1,500

2,000

3,000

2,500

2014-15 2015-16 2016-17 2017-18


Rupees in million

As per tariff code 9805.9200 of Second Schedule of Act, 2011, Business Support Services include evaluation of prospective buyers, telemarketing, call center facilities, accounting and processing of transactions, processing of purchase orders and fulfillment services, information and tracking of delivery schedules, managing distribution & logistics, customer relationship management services, operational assistance for marketing, formulation of customer service & pricing policies, infrastructural support services and other transaction processing.

Business Support ServicesThe statutory rate imposed in FY 2011-12 was 15% which stands at 13% in FY 2017-18. This sector has emerged in the list of top contributors for the first time yielding Rs. 1.6 billion and demonstrating 56% growth against FY 2016-17. The table displays the growth enclave by this sector over past years.


1 2011-12 195 - 2 2012-13 284 46% 3 2013-14 439 54% 4 2014-15 429 -2% 5 2015-16 572 33% 6 2016-17 1,083 89% 7 2017-18 1,690 56% Total 4,692

(Rs. in Million)

200

0

400

600

800

1,200

1,000

1,400

1,600

1,800

2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18


Rupees in million

With a massive growth of 293% in comparison to FY 2016-17, Labor & Manpower Services has emerged as a significant contributor in FY 2017-18. A total sum of Rs. 1.55 billion has been paid as tax on a statutory rate of 13%.

Labor & Manpower Supply ServicesThe services taxed under this category are defined under the tariff code 9829.0000 in Second Schedule of Act, 2011. This sector was included in the taxation system in FY 2013-14. The growth of this sector is demonstrated in the table:


1 2013-14 142 - 2 2014-15 256 80% 3 2015-16 350 37% 4 2016-17 394 12% 5 2017-18 1,550 293% Total 1,297

(Rs. in Million)

200

0

400

600

800

1,200

1,000

1,400

1,600

2017-182016-172015-162014-152013-14


Top 10 Taxpayers

Rupees in million

S. No. NTN Name Service Category FY 2016-17 FY 2017-18 INC/DEC %

1 0801599 Pakistan Telecommunication 770 3,087 301% Telecommunication Company Limited

2 0802694 Pakistan Mobile Telecommunication 2,731 2,665 -2% Communications Limited. 3 2142284 Karachi Port Ports, Airports & 2,241 2,219 -1% Trust Terminal Operators

4 0711579 CMPAK Limited Telecommunication 1,309 2,084 59%

5 3393123 Port Qasim Ports, Airports & 1,509 2,043 35% Authority Terminal Operators

6 0944893 E. F. U. General Insurance 1,664 1,700 2% Insurance Limited

7 4230500 Engro Elengy Ports, Airports & 1,256 1,615 29% Terminal Terminal Operators (Private) Limited

8 0711319 National Insurance Insurance 1,234 1,531 24% Company Limited

9 0823649 Qasim International Ports, Airports & 1,563 1,288 -18% Container Terminal Terminal Operators Pakistan Limited

10 0698187 Habib Bank Limited Banks 746 1,260 69%

Total 15,023 19,492 30%

Top ten taxpayers representing various service sectors contributed 19% of the total revenue in FY 2017-18.

The table demonstrates collection and growth of top ten taxpayers over FY 2016-17.


Organizations which are funded, fully or partially, out of budget grants of federal or provincial governments are termed as Withholding Agents. These include offices and departments governed by federal government, provincial government and local or district government, autonomous bodies, public sector organizations including public corporations, state-owned enterprises and regulatory bodies and entities.

Withholding Agents also include companies, defined in clause (28) of section 2 of the Act, 2011; FBR-registered

A General Overviewor SRB-registered persons or the persons specified in sub-rule (2) of rule 1of the Sindh Sales Tax Special Procedure (Withholding) Rules, 2014.

The tax revenue generated from Withholding Agents, not rendering taxable services under the Act, 2011 stood at RS. 12.5 billion for the FY 2017-18.

The table demonstrates category-wise contribution:

Withholding Agents

S. No. Service Category Amount in Rs. (million)

1 Miscellaneous 2,762 2 Government Withholding 2,579 3 Advertisement 1,987 4 Goods Transportation 1,489 5 Contract Execution 996 6 Construction 576 7 Technical, Scientific & Engineering Consultants 424 8 Advertising Agents 372 9 Labor & Manpower Services 174 10 Custom Agents 86 11 Freight Forwarding 83 12 Stevedores 82 13 Security Agencies 70 14 Business Support Services 68 15 Production Houses 55 16 Ports, Airports & Terminal Operators 54 17 Testing & Lab Services 52 18 Franchise 49 19 Commission Agents 48 20 Couriers 43 21 Caterers 39 22 Software & IT Consultants 38 23 Contractors of Building 36 24 Stockbrokers 33 25 Maintenance & Cleaning Services 29 26 Hotels 29 27 Renting of Immovable Property Services 25 28 Event Management 23 29 Management Consultants 21 30 Auditors & Accountants 20 31 Erection, Commission & Installation Services 20 32 Automobile Renting Services 19 33 Toll Manufacturing 18 34 Telecommunication 17 35 Architects 14 36 Market Research Services 14 37 Janitorial Services 14 38 Recruiting Agents 12 39 Electrical Workshops 10 40 Consultants 9 41 Auto Workshops 9 Total 12,498


Top 10 Withholding Agents

S. No. NTN Name Total Amount Contribution

1 0787223 Oil & Gas Development Company Limited 2,188 30% 2 0823778 Reckitt Benckiser Pakistan Limited 569 8% 3 3792746 United Energy Pakistan Limited 411 6% 4 0225862 Nestle Pakistan Limited 400 5% 5 4376925 Port Qasim Electric Power Company (Private) Limited 379 5% 6 0711953 Getz Pharma (Private) Limitted 347 5% 7 0657297 Fauji Fertilizer Bin Qasim Limited 333 5% 8 0711545 Pakistan Petroleum Limited 325 4% 9 4250526 Chevron Pakistan Lubricants (Private) Limited 281 4% 10 3378860 Engro Fertilizers Limited 262 4% Total 5,495 76%

Rs. in million

Withholding Agents are specified in sub-rule (2) of rule 1 of the Sindh Sales Tax Special Procedure (Withholding) Rules, 2014. In FY 2017-18, the total contribution from Withholding Agents stood at Rs. 12.5 billion, an increase of 33.2% over FY 2016-17. Two important achievements were recorded in 2017-18; firstly, a record collection of

Rs. 2.9 billion was made in the month of June, 2018 and the other was a contribution of Rs. 2.65 billion from offices and departments of Government of Sindh which reflects an increase of 157% over previous year. Table shows the top ten Withholding Agents of 2017-18.


Introduction

Sindh Workers Welfare Fund

Workers Welfare Fund (WWF) was established under the Sindh Workers Welfare Fund Act, 2014, (Sindh Act No. XXXIII of 2015) to provide for establishment of a Workers Welfare Fund in the province of Sindh.

Sindh Companies Profits (Workers’ Participation) Act, 2015 (Sindh Act No. XVIII of 2016) replaced the Federal Law of Companies Profits (Workers’ Participation) Act, 1968, to the extent of its application in Sindh.

Constitution of FundWorkers Welfare Fund (WWF) constituted under section 4 of the said Act, 2014 consists of: contribution made by Government; funds received from industrial establishments under the Sindh Workers Welfare Fund Act, 2014; leftover amount transferred to the Fund in respect of Workers Participation Fund under the Sindh Companies Profits (Workers’ Participation) Act, 2015; and other voluntarily contributions by stakeholders.

Util ization of FundFunds gathered under section 8 of Act, 2014 are applied to finance projects related to establishment of housing estates or construction of houses, flats or educational institutions or hospitals, development of plots for workers and financing of other measures for welfare of workers and their dependents.

Workers Welfare Fund & Workers Participation Fund Before 18th Constitutional Amendment Act, 2010Before the 18th Constitutional Amendment Act, 2010, the Federal Government of Pakistan through the Workers Welfare Fund Ordinance, 1971, and the Companies Profits (Workers’ Participation) Act, 1968 empowered and authorized the Federal Board of Revenue to collect the contribution of Workers’ Welfare Fund and Workers Participation Fund from industrial establishments.

Post-Devolution Scenario Consequent upon the devolution of functions under the 18th Constitutional Amendment and the legislation of Sindh Workers Welfare Fund Act, 2014 and the Sindh Companies Profits (Workers’ Participation) Act, 2015, SRB has been empowered to collect and recover the amounts of Workers Welfare Fund and Workers Participation Fund in the Province of Sindh.


• Awareness campaign was also launched through advertisements in different leading newspapers in English, Urdu and Sindhi languages.

• During FY 2017-2018, Sindh Revenue Board collected Rs. 8 billion, highest collection made for SWWF in a year.

Collection Progress during the FY 2017-2018Phenomenal increase was recorded in collection of SWWF in the FY 2017-18. SRB is continuously making efforts to expand contributions to support welfare of labor force of Sindh. The table shows growth of FY 2017-18 over FY 2016-17.

Requirement of Contribution to be paid by Industrial Establ ishmentsAny concern engaged in manufacturing or producing articles in the province of Sindh is liable to pay 2% of profit before taxation, as Workers Welfare Fund. It is also liable to pay the leftover amount of fund (fund created as 5% of profit before taxation) after distribution of the said fund among workers, as Workers Participation Fund. The leftover amounts of Workers Participation Fund, on being so deposited, becomes, a part of the Workers Welfare Fund in terms of section 4 of the said Act, 2014.

Progress during the FY 2017-2018Sindh Revenue Board presented notable progress during FY 2017-2018 as follows.• 20,000+ notices and correspondence were issued to

industrial establishments located in the province of Sindh.

• Posted pictorial slides, tickers, guidelines for payment procedure on SRB website.

Description FY 2016-2017 FY 2017-2018 Growth

Total 2.6 8 207%

Rs. in billion

expanding taxpayer-base



From a handful of registered taxpayers in 2011-12, SRB has reached a taxpayer base of 26,309 in FY 2017-18, representing an impressive increase of 27% over FY 2016-17. Yearly increase in number of registered taxpayers is given in the table.

The Call Center is extremely important as it is the first point of contact between a taxpayer and SRB. The registration of new taxpayers is carried out at the Call Center which is professionally manned not only to respond to the inquiries of the current and prospective taxpayers but also to help new taxpayers register with SRB.

Fiscal Year Total Registration Growth%

2011-12 3,450

2012-13 4,941 43%

2013-14 7,316 48%

2014-15 11,286 54%

2015-16 15,962 41%

2016-17 20,640 29%

2017-18 26,309 27%

Registered Taxpayers

Facilitating taxpayers at Call Center

Brief Introduction about Registration

Registration for FY 2017-18

503AoP’s

726companies

5,395New

Registration

4,166individuals



Month-wise Comparison of Total Registrations forFY 2016-17 and FY 2017-18

MONTH 2016-17 2017-18 Increase/Decrease (Registrations) (Registrations) July 214 410 92% August 310 422 36% September 330 275 -17% October 321 333 4% November 387 412 6% December 323 343 6% January 492 569 16% February 424 627 48% March 424 598 41% April 437 516 18% May 359 564 57% June 344 326 -5% TOTAL 4,365 5,395 24%

Month-wise Comparison of Total Registrations

0

100

200

300

400

500

600

700

2016-172017-18

July Aug Sep Oct Nov Dec Jan Feb Mar Apr May June


Total New Registration Category-Wise (Principal Activity as“Category”) for the FY 2017-2018

S.No. Service Category 2016-2017 2017-2018 INC/DEC % (Registrations) (Registrations)

1 Advertisement 82 101 23 2 Advertising Agents 33 25 -24 3 Airport Services 2 2 0 4 Alarm Services 7 9 29 5 Architects 22 28 27 6 Auctioneers 2 2 0 7 Auditors & Accountants 8 13 63 8 Auto Workshops 27 22 -19 9 Automobile Renting Services 34 49 44 10 Banks 18 15 -17 11 Beauty And Fitness Centres 69 18 -74 12 Business Support Services 111 96 -14 13 Cable TV Operators 2 1 -50 14 Call Centers 6 11 83 15 Car Or Automobile Dealers 22 119 441 16 Caterers 53 46 -13 17 Clubs 2 1 -50 18 Commission Agents 136 64 -53 19 Construction 562 719 28 20 Consultants 29 30 3 21 Contract Execution 847 916 8 22 Contractors of Building 368 998 171 23 Corporate Law Consultants 1 0 -100 24 Couriers 14 19 36 25 Custom Agents 64 75 17 26 Dredging & De-Silting 1 3 200 27 Electrical Workshops 28 32 14 28 Erection, Commission And Installation Services 32 34 6 29 Event Management 39 55 41 30 Exhibition Services '0 3 3 31 Fashion Designers 3 1 -67 32 Foreign Exchange 1 1 0 33 Franchise 23 25 9 34 Freight Forwarding 40 47 18 35 Fumigation Services 11 13 18 36 Funds & Assets Management 1 3 200 37 Goods Transportation 282 535 90 38 Hotels 13 14 8 39 Indenters & Commission Agents 15 16 7 40 Intellectual Property Services 9 2 -78 41 Interior Decorators 9 25 178

42 Investment Advisory 3 1 -67 43 Janitorial Services 19 30 58 44 Labor And Manpower Services. 98 68 -31 45 Laundries And Dry Cleaners 3 5 67 46 Leasing 3 9 200 47 Legal Practitioners and Consultants 7 6 -14 48 Maintenance & Cleaning Services 40 42 5 49 Management Consultants 44 27 -39 50 Market Research Services 13 7 -46 51 Marriage Halls & Lawns 5 2 -60 52 Mechanical Workshops 15 19 27 53 Nonbanking 4 9 125 54 Others 328 271 -17 55 Packers & Movers 4 '0 0 56 Ports, Airports & Terminal Operators 7 4 -43 57 Production Houses 45 37 -18 58 Property Dealers 64 192 200 59 Property Developers 12 3 -75 60 Property Developers & Builders 4 7 75 61 Recruiting Agents 148 24 -84 62 Renting of Immovable Property Services 291 37 -87 63 Restaurants & Cafes 80 112 40 64 Security Agencies 9 23 156 65 Ship Management Services 2 4 100 66 Shipping Agents 17 22 29 67 Shipping Chandlers 1 3 200 68 Software & IT Consultants 146 176 21 69 Sponsorship Services 2 0 -100 70 Stevedores 2 3 50 71 Stockbrokers 4 4 0 72 Surveyors 8 14 75 73 Technical Inspection & Certification Services 14 8 -43 74 Technical, Scientific & Engineering Consultants 108 122 13 75 Telecommunication 30 25 -17 76 Testing & Lab Services 21 26 24 77 Toll Manufacturing 19 24 26 78 Tour Operators 9 39 333 79 Tracking Services 5 6 20 80 Travel Agents 44 94 114 81 Valuation & Evaluation Services 5 4 -20 82 Warehouses 2 4 100 Total 4,713 5,702 21


our partners in progress



The World Bank offers support to developing countries through policy advice, research and analysis, and technical assistance. In addition, support is given to capacity development in the served countries. The World Bank Group works in every major area of development. World Bank also sponsors, hosts and participates in many conferences and forums on issues of development, often in collaboration with partners.

The collaboration between SRB and World Bank aims at increasing revenue mobilization through tax policy reforms and increased administrative efficiency in tax collection. Trust Fund for Accelerated Growth and Revenue (TAGR) Mission has been signed between both the organizations to improve SRB’s performance and transparency. To meet the set target, both organizations

World Bankare working on DLI’s such as enhancing Human Resource Capacity, increasing automation of SRB systems, increasing tax based registrations and improving risk based audit of taxpayers.

World Bank and SRB collaborated to enhance and strengthen audit function and information technology. Three comprehensive audit trainings for executives of SRB and training of young professionals at IBA, Karachi and SIFM were also witnessed in FY 2017-18.

Continuous devotion and dedication of SRB to strengthen the skills of its employees and increase their efficacy has convinced World Bank to sponsor various enhancement programs proposed by SRB in future. The upcoming year tends to open wide doors for continued program related collaborations between SRB and World Bank.

Development Partners

World Bank sponsored training on VAT at IBA, Karachi


International Bureau of Fiscal Documentation (IBFD) is a unique centre of expertise offering high quality information and education on International Tax. IBFD was established in 1938, as a small centre staffed by four researchers, with its headquarter located at Amsterdam, Netherland. The purpose of this bureau was to supply information concerning (the application of) tax law and to stimulate the development of tax science.

Employing over 70 research specialists from over 30 countries, IBFD is the pre-eminent, independent non-profit foundation that tax practitioners from all over the world rely on for high quality input:

● Independent tax research● International tax information● Education● Government consultancy

IBFDWith the aim to familiarize SRB’s operational staff with theoretical concepts along with international best practices in value added tax (VAT), a 3-day extensive training was conducted from September 22 to 24, 2017. A total of 80 employees participated in the training program. Foreign trainers facilitated the session with their profound experience and various guests further added value to the event by their presence and contribution.

SRB looks forward to further building its relationship with IBFD by organizing training programs dealing with administration of taxes and value added sales tax for employees of SRB, other government organizations and private sector.

Participants of 3-day training conducted by IBFD at IBA, Karachi


Institute of Business Administration (IBA), Karachi is the oldest business school outside North America. It was established in 1955 with initial technical support provided by the world famous Wharton School of Finance, University of Pennsylvania. Later, the University of Southern California set up various facilities at the institute and several prominent American professors were assigned to the IBA.

IBA, Karachi established the Center for Executive Education (CEE) in 2004 to run specialized training programs for executives and professionals. CEE provides opportunities to executives working at different organizations to enhance their careers by gaining knowledge and insight into state-of-the art management techniques and technologies.

A batch of 40 fresh graduates was inducted as trainees with the help of IBA, Karachi in August, 2017. A 70-day diploma course in Leadership & Tax Management was arranged at IBA – CEE which was both facilitated and

IBA, Karachiorganized by IBA. The diploma was designed to furnish newly hired interns with advanced knowledge of tax administration, policy and laws. Participants were also equipped with leadership skills and knowledge of organizational behavior to understand and cope with professional challenges. Two more batches of 40 executives completed the certificate course in Leadership & Tax Management at IBA – CEE. The certification course professionally groomed employees and provided them with an advanced exposure of tax administration.

SRB will continue its collaboration with IBA for recruitment and induction of new employees. The collaboration will also involve activities related to training employees on various topics such as public policy, taxation, micro & macroeconomics, interpersonal and managerial skills.

Batch II of Leadership & Tax Management Training at IBA, Karachi

it wing



The continuous progress made in the field of IT are adding value to the productivity of tax administration with an increase in tax revenue generation.

Technological expansions and speedy growths in business models such as Block Chain Technology, Cloud Computing and Artificial Intelligence are challenging the traditional standards of international taxation across the world. This modern era of information technology aims at advancing and extending the existing boundaries of taxation. These technological developments open up opportunities to change the way tax authorities operate and interact with taxpayers.

E-taxation usually refers to online filing and assessment of tax returns, enabling electronic payment of taxes, real-time invoice verifications, sharing information on tax

Technology and Taxationassessment between different department(s) of the government as well as facilitating audit and reconciliations. In addition, web-based portals are used for providing information, user guidance and educating taxpayers on new laws, rules and taxation issues. E-taxation possesses multiple benefits for tax authorities, some of which are:

● Automation, guidance and support for taxpayers.● Information, education, and support to taxpayers

and facilitates compliance and administration. ● Reporting procedures for the management. ● Reduction in cost of various activities involved in

managing tax records, such as printing, postage and storage, etc.

With advancements, IT Wing has enhanced Sales Tax Invoice Management System (STIMS) to improve response of complex report generation and developed online Order-in-Original application.

IT Wing


To enhance efficacy and functioning capacity of SRB, IT Wing demonstrates continuous efforts to meet constantly evolving needs that drive rapid improvement across the organization and raise productivity to persistently manage arising challenges.

A secure and reliable technological infrastructure has been built to support SRB’s day to day activities with special focus on tax administration. IT Wing promotes innovative use of technology and ensures delivery of high‐quality services and required support to run technological equipment and applications.

To technically strengthen various functions of SRB, IT Wing accepted the challenge of improvising traditional methods and introduced modern and advanced methods of contemporary technology. IT Wing has successfully managed to technically cultivate, enhance and upgrade numerous tasks such as Withholding Tax (WHT) Summary and initiation of Sales Tax Invoice Management System (STIMS) to improve responses for complex report generation.

Promoting Ease of doing businesswith new systems and tools

FY 2017-18 witnessed issuance of e-notices to taxpayers, provided technical support to SIFM for its capacity building programs and developed online order-in-original application to replace old manual register. To improve speed and responsiveness of master and transactional data, offline databases were also developed. Revenue Monitoring Web-based Dashboard has been provided to help visualize Key Performance Indicators (KPIs) and other strategic data required by management at a glance; the dashboard also allows management to access real-time information for SRB. To store and manage legal agreements such as contracts with vendors, leases, licensing agreements and employee contract details etc., Contract Management System has been put into practice. A Complaint Management System (CMS) has also been executed successfully.

To run web-based network monitoring and graphing tools, designed as front-end application for the open-source, Cacti application has been installed in


Data Center. This application allows a user to use services at predetermined intervals and graph the resulting data.

In addition, automated Show Cause Notice (SCN) issuance application, SIFM website and portal, Case Management Software and Intra-office portal with single

login will be implemented in year 2018-19. SRB’s website is being revamped to make it more user-friendly to appeal and assist potential and existing taxpayers. It will also help conduct HR’s talent search. Emphasis is being laid on gradual improvement in documentation procedures for application development processes to level up the organization and provide better facilities and services.

survey & developmentwing



An independent Wing of Survey & Development (S&D) was created in the third quarter of FY 2017-18 to develop strategies encompassing short, medium and long term activities for increasing the tax net. This will also help in documenting the informal economic activities in the province of Sindh.

S&D uses different methods to trace out un-registered and non-compliant service providers. As a first step, the Wing gathers information from the concerned departments such as, SECP, FBR and others. After sorting information, the details of unregistered service providers are sent to the concerned Commissioners for necessary action under Sindh Sales Tax on Services Act, 2011. Similarly, after examining the date of registered but non-compliant service providers, S&D prepares a report and forwards the same to the respective Commissioners for further necessary action. The existence of unregistered and non-compliant service providers is also verified through physical surveys where such service providers are found to be non-responsive.

Survey & Development Wing (S&D)

The Wing has examined more than 40,000 profiles of companies/AOP/Individuals from various sources, i.e. FBR, SECP, Associations & Directories, data of registered/e-signed up companies receiving services from un-registered persons, etc. The S&D Wing is progressing day by day and developing innovative methods to ensure that service providers do not remain untapped.

The S&D Wing plans to conduct physical surveys throughout Sindh in phases to detect new taxpayers carrying out business activity without being registered with SRB. The physical surveys will continue to ensure the registration of un-registered service providers and compliance by tax defaulters as well as evaders.


Mon itoring at Business PremisesIn order to reveal untapped revenue, SRB initiated physical monitoring at the business premises of potential taxpayers. This initiative was taken under Section 54 of Sindh Sales Tax on Services Act, 2011. The monitoring helps assess whether the declarations, tax returns and payments made by taxpayers are correct.

Based on their declarations, Hotel & Restaurants were selected for monitoring by SRB staff, in compliance with the statutory requirements. This initiative has led to increase in revenue from the Hotel & Restaurants sector. Selectively, this has also been practiced in the case of few Beauty Parlors. Given the outcome and the growth in revenue resulting from this initiative, physical monitoring is likely to be expanded to other cash-based services. In the long run, SRB is working on finding an institutional arrangement whereby the transactions of cash-based services, more importantly hotels, restaurants, beauty parlors, etc. will be monitored electronically on real-time basis. Models are being studied to this effect and substantive progress is likely to be made.

The Wing wrote to over 200 organizations enquiring about their use of services from caterers and event management companies; this exercise yielded data for 140 service providers in these two categories. Break-up of the same is given under:

Furthermore, the Wing carried out physical surveys of different non-filers to confirm their activities and nature of business. Besides this, the information of over 500 marriage halls and lawns were obtained with the objective of registering them with SRB.

Service Tariff

No. of Name Heading Companies/AOP’s / Individuals

Catering 9801.5 Registered Un-Registered 199 141 Total 340


S & D at a Glance

Note: Out of 40,000, only 6,500 are found to be un-registered and pertaining to Sindh, rest are either registered or belong to other provinces. Furthermore, 2,500 out of 6,500 were NGOs, Trusts, Educational Institions, Provident Funds and importers/exporters/trading companies. Moreover, 2,806 out of 4,000 un-registered persons have already been referred to concerned units and the balance of 1,194 is under scrutiny.

fbr, secpassociation, srbportal & other

sources473travel & tour

operator

155construction

services

769other

sectors

6,500Un-registered

personsrelevent to sindh

40,000Companies/aop’s

individualsanalyzed

1,044witholding

agents

365consultancy

services

audit wing


Introduction Taxation system of Pakistan empowers taxpayers to self-assess their income and tax liability and pay the outstanding amount voluntarily. This system is generally known as Universal Self-Assessment Scheme aimed at fostering voluntary compliance.

Tax Audit is done to examine that whether the self-assessed tax liability and adjustments incurred are correctly reported for the period under audit and the payment of due tax is made in the provincial exchequer. It is an essential tool to monitor the compliance level.

Audit Wing at a glanceThe Audit Wing was equipped with eight officers of SRB to increase efficiency of the department by enhancing its working strength and capacity. To conduct audit processes, tax auditors have to go through and analyze complex documents such as financial statements of taxpayer under audit. Frequent training sessions were organized for officers of Audit Wing to further enable them with well-equipped audit tools and contemporary audit techniques.

The table depicts the performance of Audit Wing in FY 2017-18

Audit for Revenue Generation

In FY 2017-18, Audit Wing successfully met all the Disbursement Linked Indicators (DLIs) targets set by World Bank which depicts high commitment to follow the same in future. In the last quarter of FY 2017-18, ninety two new cases were selected as per the risk criteria approved by World Bank for field audits. Forty nine audits are planned to be conducted at the business premises of taxpayers. This initiative will effectively fulfill the audit objectives to plug in loopholes in tax compliance.

For FY 2018-19, Audit Wing is committed towards continuous training of its staff. The Wing will be further strengthened through induction of professionally qualified staff. The management with collaboration of World Bank has maintained its focus on the Wing with the objective of making it more effective and efficient in performing its functions.

Establ ishment of Internal Audit WingThe fourth quarter of FY 2017-18 witnessed the creation of an Internal Audit Wing headed by Chief Internal Audit. This Wing will independently monitor and ensure effective and transparent utilization of SRB’s expenditure budget, ensuring transparency and promoting accountability.

An effective internal control system shall provide reasonable assurance that policies, processes, tasks and other aspects of an organization are being effectively implemented. It will also ensure the quality of internal and external reporting and help maintain compliance with applicable rules and regulations.


No. of Cases Assigned for Audit 103

No. of Contraventions Issued 31

Contravention Amount (Rs. in million) 948

Amount Recovered (No. of Cases) 29

Audits Completed 30

hr wing


Multiple activities were run by HR in FY 2017-18 with the objective of appraising employee performance, enhancing productivity at workplace and creating an energizing and engaging environment.

Batch III Recruitment and OrientationA group of 40 energetic young graduates were hired as interns through a merit based process. The recruitment process included NTS examination, written test and group discussion by IBA, Karachi followed by interview with diversely composed panel of senior officials of SRB and GoS.

To equip these interns with adequate knowledge about tax administration, economic & financial issues and fiscal & monetary policies, a specialized two-month training program was organized at IBA, Karachi followed by a General Training Course focusing on tax laws including sales tax on services conducted at SIFM.

World Bank Group Employee Engagement Survey To enhance employee engagement, a survey was conducted by two enumerators assigned by the World Bank. All employees of SRB were interviewed on basis of detailed questionnaires to collect adequate data for assessing and improving employee engagement.

HR team extended its services by helping and coordinating with enumerators in planning and organizing the interviews during December, 2017 and January 2018.

Health Insurance Awareness SessionsIn collaboration with the insurance company, a comprehensive health insurance policy was successfully implemented. A session was conducted to create awareness about the scheme among SRB employees.

Performance Evaluation with new PER FormatTo carry out fair evaluation of all employees of SRB, a new Performance Evaluation Report form was introduced with the objective of analyzing employee performance on various criteria.

Empowering Our People


Dress Code guidel inesTo maintain and promote workplace attire according to standards of professional environment, SRB employees were equipped with essential guidelines through training sessions.

SRB Welfare FoundationTo support and protect health, safety, welfare, security, and dignity, a welfare policy has been formulated as a part of facilities and amenities for all employees.

Updated Leave Pol icyTo entertain, manage and avoid ambiguities, leave policy has been made known to all SRB employees. This also serves employees that intend to travel abroad for educational purposes.

Updating Employee Data in HRMSSRB stays updated in collecting and entering accurate information of its employees. The data is updated on regular basis, ensuring proper information of all employees. To maintain high quality data, a new form was designed, developed and circulated among employees to collect their updated information.

Attracting and Promoting Diverse TalentSRB is a youthful organization with an average employee age of 32 years. It encourages fresh graduates and young professionals from different fields, gender, age and regions of Sindh to join the team. SRB keeps it recruitment process transparent and ensures hiring on merit. The organization celebrates diversity and encourages an inclusive environment.

The Pie chart depicts the diverse educational background of SRB’s workforce.

MBA/MPA/M.Com/MA/M.Sc/MS/M.E/LLMBBA/BPA/B.Com/BA/B.Ed/B.Sc/BS/BE/BSCS/BSIT/LLBACCA/CA/ACMA/FCMA/FCCA

EducationDiversity 35%

5%

60%


5

0

15

30

45

75

60

90

105

120

FCMA FCCA ACMAACCA CA Law MBAGraduatesMasters


Employees engaged in discussion

Gender DiversityTo maximize human resources and build an efficient and productive workforce, SRB encourages females to join

its workforce. Since the establishment of SRB, continuous increase in number of female induction has been witnessed.

sindh institute offiscal management



Workshop on ShowCause Order Recovery

System

August1 - 3, 2017

August1 - 10, 2017

Workshop on BankingPractices

August 10,2017

Fundamentals ofTax Audit

A decision was made by Honorable Chief Minister of Sindh in 2nd Advisory Council Meeting held in September, 2013 to form an institute under the umbrella of SRB with the objective of capacity building of employees of SRB and other government departments

SIFM - Introduction

Train ing Sessions conducted by SIFM

in areas related to fiscal management. In accordance with this decision, SIFM came into operation in August, 2017. Since then, SIFM has been on a progressive journey of training and developing employees with multiple technical and interpersonal skills.


September22 - 24,

2017

Training on GlobalVAT/GST by IBFD

October12 - 13,2017

Workshop onStrengtheningAudit Function

October 30 -November 24,

2017

General Training Coursefor New SRB Interns

Comprehensive AuditTraining Workshop

March12 - 15,2018

November13 - 17,2017

Study tour toLebanon


SRB Interns at IBA, Karachi

Taxpayer Facil itation


Promoting Voluntary Compl ianceTo promote voluntary compliant tax culture, SRB has always supported a rational and sustainable tax system that is taxpayer friendly. SRB’s policies ensure that laws, rules and procedures for sales tax on services are easy to understand and facilitate voluntary tax compliance.

Inculcating Tax-Paying CultureTo equip new taxpayers with knowledge of tax policies and processes, guidance is provided by SRB staff in person and through various supporting tools. Honesty, transparency and accountability have been the core principles of SRB that inculcate taxpaying culture.

Tax Amnesty SchemeTo facilitate taxpayers achieve compliance level, a relief package was introduced in FY 2017-18, providing substantial benefits and relaxation to taxpayers, service providers and withholding agents under the Act, 2011. In response to taxpayers’ request, an extension of ten days was given. This enabled taxpayers to liquidate their outstanding liabilities subjected to default surcharges without any penalty. The exercise helped SRB to collect a sum of Rs. 2 billion and further strengthened the faith of taxpayers in SRB’s policies.

Protecting Tax Payer Rights Right to Fair & Just Tax SystemThe system and structure of taxation demands impartiality and direction-oriented path. It is the right of all registered taxpayers to be provided with a transparent and fair working environment. Sindh Revenue Board maintains its focus on protecting rights of its taxpayers.

Advising, Guiding and Resolving DisputesSRB always welcomes its taxpayers to seek advice related to tax matters. Taxpayers are guided on e-registration, e-filing, e-payments, updating tax profiles, etc. SRB’s staff is always willing to guide the tax payers whenever they need any advice about their tax affairs. Moreover, taxpayers are provided with an opportunity of being heard to settle their tax matters.

Empowering new taxpayersEducating and facilitating newly established companies, AOP’s or individuals about the tax system and its importance results in high level of voluntary compliance. Persons that are required or desire to be registered with SRB are facilitated about the overall tax system of SRB and its registration requirement. Taxpayers are informed and facilitated about their tax ambit and the procedure of registration and payment of their due taxes.



Taxpayers Right to AppealTaxpayers have some fundamental rights to exercise while dealing with their taxation matters. The right to file an appeal against the decision/order passed by a competent officer, before an authority of appropriate jurisdiction is an important one.

Being the first appellate forum of SRB constituted under section 57 of the Sindh Sales Tax on Services Act, 2011, the Commissioners of Appeals hear and decide for the appeal(s) filed by persons aggrieved by the orders-in-original passed by an Assistant/Deputy Commissioner of SRB. With the expansion of tax net and increase in disputes, the volume of appellate work has also considerably risen. Taxpayers are required to be facilitated properly so that the appeals can be decided expeditiously with quality decisions and implementation of the provisions of Sindh Sales Tax on Services Act, 2011 can be harmonized.

Important measures were taken to make the appeals process smooth and expeditious. Experienced and suitable persons have been appointed in the Wing consisting of Commissioners (Appeals), Assistant Commissioner (Acting as Registrar of Appeals), Assistant Commissioner (acting as Appeals Manager/Roster Manager). These efforts resulted in both making the Wing’s functions expeditious and building confidence of taxpayers on the decisions and integrity of the Wing.

At the end of FY 2017-18, another Commissioner was appointed in Appeals to further strengthen the Wing. This decision was taken to improve and speed-up the disposal and quality of decision made by the Commissioners (Appeals). Furthermore, the decisions made by the Commissioner (Appeals) are also uploaded on the web portal of SRB for taxpayers.

Acronyms

1. AOP – Association of Persons

2. BOR – Board of Revenue

3. CEE – Center for Executive Education

4. CMS – Complaint Management System

5. DLI – Disbursement Link Indicators

6. E&T – Excise & Taxation

7. FBR – Federal Board of Revenue

8. FY – Fiscal Year

9. GDP – Gross Domestic Product

10. HR – Human Resources

11. IBA – Institute of Business Administration

12. IBFD – International Bureau of Fiscal Documentation

13. IT – Information Technology

14. KPI – Key Performance Indicators

15. NTS – National Testing Service

16. SCN – Show Cause Notice

17. S&D – Survey & Development

18. SECP – Securities and Exchange Commission of Pakistan

19. SIFM – Sindh Institute of Fiscal Management

20. SRB – Sindh Revenue Board

21. SST – Sindh Sales Tax

22. SSToS – Sindh Sales Tax on Services

23. STIMS – Sales Tax Invoice Management System

24. SWWF – Sindh Workers Welfare Fund

25. SWWPF – Sindh Companies Profits (Workers’ Participation) Act

26. TAGR – Trust Fund for Accelerated Growth and Revenue Mission

27. VAT – Value Added Tax


The Empress Market was constructed between 1884 and 1889 to commemorate Queen Victoria.

(Location: Karachi)

Umerkot Fort is the birthplace of Mughal Emperor Akbar. (Location: Umerkot)

Masjid e Tooba (Gol Masjid) was built in 1969. (Location: Karachi)

Gori jo Mandir is a 3000 year old Mandir. (Location: Tharparkar)

Shah Jahan mosque was constructed by Mughal Emperor Shah Jahan.

(Location: Thatta)

Ranikot Fort was built by Talpurs in 1812. (Location: Sann, Jamshoro)

[but as for you, · mr. khalid mahmood strongly believes in empowering team members and encouraging...

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