KARACHI: The Sindh government has increased the rate of stamp duty by 50 per cent on bank loans in the budget 2016-17.

Under new slabs which become effective from July 1, the duty will be 0.3pc on bank loans of up to Rs500,000 against 0.2pc earlier.

The levy will be Rs1,000 on loans of up to Rs1 million, Rs2,000 on Rs2m, Rs10,000 on Rs50m and Rs150,000 on loans of up to Rs500m.

The new finance bill has also raised stamp levy on bill of exchange, another banking document, to Rs3 per thousand from Rs1.5.

Stamp duty rate for bill of entry, another major customs document used for clearance of imports, has been doubled to Rs1,000 per piece. The move is apparently aimed at compensating huge revenue losses being incurred on goods cleared through Web-Based One Customs (WeBOC), a software programme for customs clearance.

At present, stamp duty is being collected on bills of entry (goods declaration) through the manual system managed by the Pakistan Revenue Automation Ltd. There is no arrangement at customs to collect stamp duty on goods cleared through WeBOC. According to an estimate, about Rs250m is lost in revenue under this head every year.

A major change in stamp duty rates on property transactions has been made in the new finance bill. The value of property units listed in valuation table used to assess stamp duty has been increased by 20pc across the board from July 1. The values in the valuation table were last raised in 2010.

The Board of Revenue (BoR), Sindh, has been trying for an increase in property values recorded in the table to bring them on a par with the property prices prevailing in the market.

Published in Dawn, June 26th, 2016