The tax proposals submitted by the Board of Revenue (BoR) Sindh for the upcoming budget suggest doubling stamp duty rates from Rs1.50 per thousand to Rs3 per thousand on bill of exchange.
The BoR has also proposed a 50pc increase in duty rates on financing documents, which include sale and purchase instruments on a mark-up basis, agreement of letter of hypothecation or pledge, mortgage, and memorandum of deposit of title deed or deed of floating charge executed in favour of a banking company by any of its customer under any mode of financing not based on interest in a single transaction.
The stamp duty rate for financing document with amount up to Rs100,000 will be 0.3pc (ad valorem), Rs1,500 on documents worth up to Rs1m, Rs53,000 on Rs100m, Rs75,000 on Rs300m, and Rs150,000 for documents worth up to Rs500m.
The BoR has also proposed drastic increase in stamp duty rates on power of attorney to discourage its use in making sale deeds of properties. The excessive use of power of attorney for sale and purchase of properties has adversely affected stamp duty revenue.
Accordingly, the stamp duty rates will be Rs100 for power executed for the purpose of procuring the registration of one or more documents in relation to a single transaction.
An amount of Rs500 will be charged as stamp duty in cases when authorising one person or more to act in a single transaction. Stamp duty will be Rs1,000 on power of attorney when authorising not more than five people to act jointly and severally in more than one transaction. In any other case, Rs100 will be charged for each person authorised.
The BoR hopes to generate Rs1.892bn from raise in stamp duty rates on power of attorney.
It has also been proposed to revise upward values of properties recorded in the valuation table for urban immovable properties by 20pc across the board from categories 1 to 111 and categories from 1V to V1 merged/adjusted in category 111.
The stamp duty will be increased from Rs300 per ‘produced index unit’ to Rs800 on values of rural immovable properties recorded in valuation table.
The move has been suggested to rationalise values of properties given in valuation table in ratio with the market price of properties.