Sindh government gives tax relief to hotels

KARACHI - PPP-led Sindh coalition government has announced a major relief for the hotels and also reduced stamp duty in the coming budget for 2009-10.
Sindh Chief Minister Syed Qaim Ali Shah while presenting his second budget as Chief Minister for Financial Year 2009-10 tabled a finance bill to rationalise provincial taxes.
In Finance Bill, the Sindh government has proposed to decrease the Occupancy Ratio of hotels from existing 80 per cent to 40 per cent.
At present the provincial government is charging bed tax from the hotels at a fixed occupancy ratio of 80 per cent, although the occupancy fluctuates from 80 to 20 per cent, depending of political and law and order situation in the province and country as well.
However, in the coming budget the hotels industry would pay tax on the basis of 40 per cent occupancy only.
This was one of the major demands of the hotels industry from the provincial government as the hotels business has been sustaining a blow for the past two and a half years in the wake of political uncertainty and bomb blasts.
Bringing amendments to section 8 of Sindh Act -9 of 1977, there shall be levied tax on hotels to be called the hotel tax on ad-valorem basis at the rate of seven and half per cent of room rent per lodging unit per day.
Amendments in the Act to be read as, In case of hotel charging room rent, one hundred rupees or above but not exceeding one thousand rupees, the government will collect the tax on forty per cent of the total number of lodging units.
Meanwhile, in case hotel charging room rent exceeding one thousand rupees, the government will collect tax levy on sixty per cent of lodging units.
Sindh Chief Minister Syed Qaim Ali Shah in his budget speech said that despite dire need for additional resources, the government has present tax-free budget in essence. The government has rationalised some taxes aimed more relief to industries, Shah said.
According to Finance bill, for providing relief to the exporters it is proposed to reduce the Stamp Duty on Bill of Exchange by 50 per cent from the existing 0.3pc to 0.15pc.
However, stamp duty on acknowledgment receipts, agreement or memorandum of an agreement, bond, certificate or the other document, contract, purchase order, counterpart or duplicate, lease, promissory note, and on settlement has been rationalised and increased nominally as the existing rates on these documents have become irrelevant.
While, Sindh Chief Minister in his speech made it clear that the increase in stamp duty will not impose any direct burden on general public.
Furthermore, on the recommendation of Sindh Public Committee, a penalty has been imposed on default of registration on various kinds of vehicles for preventing default and reducing misuse of unregistered vehicles in criminal activities. The penalties on these vehicles suggested such as vehicles default does not exceed six month will pay Rs5000, wile unregistered vehicles which default exceed more than five years will pay one lacs rupees.
Meanwhile, electricity duty has also been reduced to provide the relief to domestic, commercial, industrial and agricultural consumers.