SRB April Revenue Rises 24%: Ensure SST Compliance

The Sindh Revenue Board (SRB) has announced a notable 24% increase in revenue collection for April 2024-25, amassing Rs23,334 million compared to Rs18,836 million in April 2023, a development with significant implications for tax compliance in Sindh. Our tax law firm underscores the need for clients to align with SRB regulations to avoid heightened scrutiny amidst this fiscal upswing.

The cumulative collection for FY 2024-25 up to April stands at Rs234,998 million, reflecting a 27% growth over last year’s Rs185,257 million, signaling robust tax enforcement by the SRB. This growth follows a pattern of consistent increases, as SRB collected Rs185.2 billion in the first nine months of FY 2023-24 (a 29% rise) and Rs237 billion for the full FY 2023-24 (a 28% rise), surpassing its targets, according to historical data. However, this narrative of “improved fiscal performance” warrants scrutiny—such growth may stem from stricter compliance measures, potentially increasing audit risks for businesses, rather than purely economic recovery, especially given Pakistan’s ongoing economic challenges.

For clients, this revenue surge emphasizes the importance of compliance with the Sindh Sales Tax on Services Act, 2011, particularly in sectors like hospitality and services, which SRB has historically targeted for enforcement, as seen in past crackdowns on Karachi eateries for non-compliance with Point of Sale (POS) systems. Businesses must ensure accurate SST filings, timely tax payments, and integration with SRB’s digital platforms to avoid penalties, which could be as high as 5-10% of default surcharges, based on historical SRB incentive schemes.

Moreover, the SRB’s focus on automated tax collection, as established under the Sindh Revenue Board Act, 2010, means clients should leverage Alternate Delivery Channels (ADCs) for online tax payments, ensuring documentation aligns with Federal Board of Revenue (FBR) standards to mitigate risks of dual taxation or disputes. The SRB’s aggressive collection may also signal potential tax rate hikes or policy shifts in the upcoming budget, requiring proactive tax planning.

Our firm advises clients to review SST compliance, strengthen digital tax processes, and prepare for SRB audits, ensuring fiscal readiness in this era of heightened enforcement.