PESHAWAR, June 3: The NWFP government has set a Rs50 million recovery target collectively under both the components of land tax and agriculture income tax for the financial year 2002-03, according to official sources.

The new financial year’s target has been regarded, by official circles, as “a clear reflection of incapacity of the new piece of law introduced by the sitting military-backed civil government in the province”.

The move of fixing Rs50 million target has been attached extra significance on the part of some of the official circles, apparently due to the reason that it would be much less than the benchmark set under the same head during the last two financial years.

The provincial government had fixed Rs180 million annual target for the financial years 2000-01 and 2001-02, however, in none of the two financial years the government could meet the target. In both the financial years the annual recovery target was missed with big margin — especially during 2000-01 when no recovery could be made due to non-application of the new piece of law introduced by the present government.

Inability of the tax collection authorities concerned in terms of improving recoveries has been made as a justification to fix the next financial year’s target at a level less than the last financial year’s.

“We have fixed the target at the realistic level keeping in view the capacity of the agriculture sector,” said sources while describing the Rs180 million target beyond the provincial agriculture sector’s capacity.

Interestingly, the benchmark being set for the financial year 2002-03 appears to be Rs20 million less than the Rs70 million collected during the 1998-99 financial year 1998-99 — when Sardar Mehtab Ahmed Khan was finance minister of the province.

“The new piece of law — introduced in July 2000 — has made the provincial government to lose the tax base it had,” said a senior government functionary.

The provincial finance managers while talking to this scribe, adopted the stand that the new law had removed discrepancies, which existed in the previous law — duly adopted by the last provincial assembly.

However, those who are opposed to the new law said that instead of giving incentives to the owners of small landholdings the land tax and agriculture income tax ordinance 2000, carried inbuilt loopholes to facilitate the big landlords.

After the provincial tax collection machinery failed to improve recoveries under the head of agriculture income tax during the financial year 2001-02, the government applied major cut in its recovery target under the same head for the current financial year.

Initially, the downward target, for the current financial year, had been fixed at around Rs70 million. However, after the receipts were reeling far behind the downward revised target the government slashed the target by Rs20 million, fixing it at Rs50 million — a target also unlikely to be met in view of the recoveries made during the first ten months of the current financial year.