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KARACHI: The Sindh government has decided to invoke parliamentary process to raise professional tax limit from Rs100,000 to Rs500,000 for banks, mudarabas and limited companies.

Sources at the government revealed this week that the chief minister has given approval to revise the tax limit.

Excise and Taxation Secretary Majeed Pathan told Dawn that the existing tax limit was fixed in the Finance Act of 1999 and business of banks and limited companies has since expanded and multiplied manifold.

This has justified government decision to raise the maximum tax limit to Rs500,000.

The issue was discussed at a meeting between secretary finance, secretary law and secretary excise and it was agreed that the raise in professional tax limit would not affect shops and small businesses which still pay far less than the existing limit.

The meeting noted that the province is not authorised to unilaterally raise the tax limit as the relevant Professions Tax Limitation Act would have to be amended through the National Assembly.

The secretaries felt that the consensus among the federating units was necessary to raise the professional tax limit and hence the issue would be raised in the next meeting of the Inter-provincial Coordination Committee.

The excise department collected Rs160.4 million during the first seven months of FY14 against Rs141.3m last year.

The professional tax rate for shops and salaried professionals is Rs500 per year while medium sized companies pay Rs10,000 and small companies pay just Rs5,000 per year. Petrol pumps and marriage halls pay Rs2,500.