KARACHI, May 22: Now that the majority of the big feudal of Sindh, Balochistan, Seraiki belt, Punjab and other parts of the country are with the present military-politicians set up since 1999 , the agriculture income tax has ceased to be the buzz word and scant attention is being paid on its collection.

Landed gentry in Pakistan is now no more confined to the traditional feudal families but quite a big number of gentlemen from the armed services and civil servants have joined this elite club and in a way enjoy complete tax amnesty.

How many of us remember that it was late Zulfikar Ali Bhutto who on January 5, 1976 announced the third generation of land reforms and introduced the tax on agricultural income. This tax on agricultural income became effective from July 1, 1977 budget. But in matter of days, after late General Zia-ul-Haq took over on July 5, 1977, he repealed the land reforms and tax on agricultural income without any formal announcement. Zia-ul-Haq won the feudal on his side and then he went on to rule Pakistan till 1988 when he got perished in Bhawalpur dust in a C-37 aircraft crash.

The tax on agricultural income was again introduced in 1993 by Benazir Bhutto. It is another matter that collection of tax on agricultural income was hardly a few lakh rupees in Sindh. Abdullah Shah, the Chief Minister of PPP government in Sindh during 1994 and onward kept on mounting tax pressure on the city dwellers by increasing property tax and then imposing a surcharge on property tax and even when this was found insufficient, a surcharge on the surcharge of property tax was enforced.

Nawaz Sharif should be given credit for trying to enforce a harmonised agricultural income tax system in the country in 1997. He formed a Committee headed by Dr Hafiz Pasha. This committee included politicians, growers and representatives of other segments of the population. But before this committee could complete its work the great interruption came on October 12, 1999 and every thing came to naught.

Since the time Shaukat Aziz took over the charge of finance and economic affairs in 1999, there have been tax surveys, property surveys and tax administration reforms, all targeting the city based traders and businessmen. Landed gentry, by and large, remained immune of all reforms and were kept outside the purview of all the tax surveys.

Obviously, the drought and dry weather was one plausible excuse for sparing the farmers from all such exercise that would have brought them in tax net. But farmers are one segment of the agriculturists at the bottom and the feudal and retired personnel from armed services and civil service in agriculture are the other who are on the top. Their life styles remain unchanged. They keep on visiting Europe and the US every summer and they also perform Umrah with religious zeal. Then they grace the national and provincial assemblies and Senate and now the 106 district assemblies with their presence during winter.

In his one of the first statements he gave after taking over the responsibility as Prime Minister in 2003, Mir Zafarullah Jamali made it clear that there was no need of any land reforms in the country. Then we heard about corporate farming which was said to be a licence for unlimited land-holding.

Since the time, the tax on agricultural income was introduced in 1993, there have been at least five or six different laws. The IMF wanted an harmonised agricultural income tax law in all the four provinces. In 1999-00 the IMF expected an agricultural income tax collection of 0.3 per cent of the GDP which was roughly about Rs9 billion. Hardly Rs1 billion figure was ever achieved in agricultural income tax.

In Sindh, the collection of AIT in 1993-94 was merely Rs0.3 million. It increased to Rs1 million in 1995-96 and to Rs21 million in 1996-97. The AIT collection stood at Rs 110 million in 1997-98, Rs225 million in 1998-99 and virtually nothing in 1999-00 because the ordinance got lapsed. In last three years the average collection is said to be hardly Rs300 million. The Sindh government has never released AIT figures.

Agriculture constitute 24 per cent of the GDP and in rupee terms should worth about Rs1.4 trillion. Agriculture deserves subsidy and government assistance. But providing subsidy assistance to agriculture is one thing and taxing income of the agriculturist like income on other professions is another.

Officials in Sindh government say that land-holding records are now being computerized and it has been done in five districts which are Hyderabad, Mirpurkhas, Sukkur, Larkana and Khairpur. Similar computerization of land-holding record in other districts is under way. Patwaris are being trained to make correct crop assessment and incomes thereon. The Revenue Academy in Hyderabad is being re-organized.

The government of Sindh is averse to the idea of setting up a Provincial Revenue Service. There is, however, a Fiscal Coordination Committee. There is no word as to how this Committee works.