The Public Accounts Committee (PAC) of the Sindh Assembly has strongly condemned the Federal Board of Revenue's (FBR) practice of deducting advance Withholding Tax on bank transactions of the provincial government's autonomous bodies and authorities. During a meeting chaired by PAC Chairman Nisar Khuhro on Wednesday, the committee termed the deductions as illegal and a direct assault on Sindh's financial autonomy.
Committee Decides to Escalate Issue
The PAC decided to write a formal letter to Chief Minister Murad Ali Shah and Chief Secretary Asif Haider Shah, urging them to take up the matter at the highest level with the federal government and the FBR. The committee emphasized that such deductions undermine the province's fiscal powers and violate constitutional provisions.
Audit Reveals Unauthorized Deductions
The audit raised a pointed objection that banks had deducted Rs125 million as Withholding Tax on the department's transactions without proper authorisation. The audit further noted that the department had failed to obtain tax-free numbers for the protection of government funds, calling the practice an unnecessary burden on the state exchequer.
According to the committee, the FBR's action not only imposes financial strain on provincial bodies but also sets a dangerous precedent for federal encroachment on provincial rights. The PAC directed the relevant authorities to ensure that no such deductions occur in the future without explicit legal backing.
Call for High-Level Intervention
The committee's decision to involve the Chief Minister and Chief Secretary underscores the seriousness of the issue. The letter will request immediate intervention to halt these deductions and seek a legal review of the FBR's authority to impose advance taxes on provincial funds. The PAC also plans to raise the matter in the Sindh Assembly for a broader debate on provincial autonomy.
