KARACHI, May 14: The recovery of tax on agricultural income in Sindh continues to show declining trend for the fifth consecutive year in kharif 2004-05 when it has come down to about Rs163 million. In last five years, the tax collectors, the Sindh Board of Revenue, recovered Rs444.77 million in the 2000-01 which dropped to Rs397.02 million in 01-02. It further fell to Rs251.03 million in 02-03 and to Rs 201.12 million in 03-04.
Compare this recovery of tax from the agriculturists with that of collection being made in Punjab, there it is more than Rs1 billion a year and the bulk of it said to be recovered from the small to medium farmers in the Central Punjab.
Kharif includes cash crops — cotton and sugarcane -— and the rice. Cotton showed much better results this season in terms of per acre yield and is said to have generated good income to the farmers. Rabi mainly includes wheat on which the government has increased procurement price to Rs400 for 40 kg.
Decline in collection of tax on agricultural income during last five years is being witnessed in face of government claims on growth in farm production and also in the incomes of the farmers during last two years. The Board of Revenue has also been reducing the demand on the farmers every year since 99-00 for some unexplained reasons. In the year 99-00 the Board’s demand for tax on agriculturists in Sindh was Rs514.53 million which was brought down to Rs512.91 million in 00-01, Rs488.54 million in 01-02, Rs316.77 million in 02-03, Rs247 million in 03-04 and Rs205.33 million in kharif this year.
A grade five employee of the Board of Revenue tapedar or patwari is said to be the linchpin of the provincial revenue system who carries out survey, work out the crop projections, do ‘partal’ (assessment) and work out the price of the produce and tax on the income. He is prone to pressures from the big land owners of his area and recovers tax only from the small farmers with little or no influence or clout.
Sindh is home to the most rich and politically powerful feudal families that own among themselves 24,000 farms. Each of these farms is of 100 acres and more. The total area calculated under these farms is said to be 4.8 million acres or 13 per cent of the farm area. The average farm size is said to be 200 acres. On average, a large farmer in Sindh owns 105 times as much land as a small farmer.
These big farmers are well represented on the government and the opposition benches in the Senate, the National and the Sindh assemblies and in the district, town and the taluka boards of their respective areas.
“Sindh has the highest percentage of farm holdings of over 100 acres, and such farms cover 15 per cent of the farm area,” reported the Annual Review of 2004 document of the Social Policy and Development Centre (SPDC). The same document reveals that Sindh has the highest incidence of landlessness — 62 per cent or nearly 700,000 rural households. There are 300,000 households or 11 per cent tenants in the province.
Besides skipping tax on their incomes, the big farmers of Sindh also do not pay full amount of the services they get. The water rate collection has been showing a downward trend for last five year. The irrigation department collected Rs598 million in 99-00. In 00-01 the farmers paid Rs429 million, 01-02 Rs 342 million, 02-03 Rs290 million, 03-04 Rs 293 million and Rs162.83 million.
About half a dozen provincial taxes being collected from the urban population of the province are showing impressive rise as against a virtual exemption from tax and services charge payment by the big land lords of the province. The Sindh Excise and Taxation department is all set to exceed the collection of Motor Vehicle Tax target of Rs1.3 billion this year because in nine months the recovery is over one billion rupees. The infrastructure cess has already exceeded the nine month proportionate target of Rs2.1 billion and is reported to be around Rs2.4 billion. Total target for the year is Rs2.8 billion and there are strong indications of this cess recovery exceeding Rs3 billion figure.
The department reports meeting 85 per cent of Rs5.37 billion tax target in the nine months and is expected to go beyond Rs6 billion figure in the final counts.
