September 01, 2006	Friday	Sha'aban 7, 1427

From A Correspondent

PESHAWAR, Aug 31: The NWFP government's policy to expand agriculture income tax base for fetching higher revenue receipts fell far short of yielding the desired results, as the tax collection agencies failed to put up an impressive showing during the last financial year.

The recently compiled data show the provincial government missed the Rs50 million farm income tax collection target for the financial year 2005-06 with a big margin.

Officials said the province recorded total receipts of about Rs20 million, missing the annual target by about Rs30m. Initially, the collection target was fixed at Rs70 million for the fiscal year 2005-06. However, in view of the poor recoveries, the target was brought down to Rs50 million that too could not be achieved.

Revenue department sources attributed the shortfall in revenue to the losses suffered by farmlands in Nowshera, Peshawar and Charsadda -- three major crop growing districts -- due to floodwater in June 2005.

"The receipts during the fiscal year 2005-06 were even much less than the collections recorded in 2004-05 and 2003-04," said the sources.

Though the successive provincial governments attempted to improve the agriculture income tax collection by expanding the tax base, no major gains could be recorded, as in not a single year, since the introduction of the farm tax on acreage basis in the fiscal year 1995-96, the province could achieve annual recovery target.

"The target could not be achieved when it was fixed at Rs35m," said the sources, referring to the recovery position during the early years of its introduction.

In an attempt to improve recoveries on account of farm income tax, the last military-backed provincial government made significant changes under the taxation system meant for the agriculture sector. However, the last government's move of introducing double tax under the farm income tax head -- one on acreage basis and the other on income earned through agricultural activities -- failed to achieve the desired results.

The officials said the poor results recorded during the last year had left the provincial government with little hope to achieve the collection target for the current financial year, which had been fixed at Rs75 million.

More than 46,500 acres of land with standing crops have been hard hit by the recent floods in all 24 districts of the province. Farmers in Charsadda, Mardan, Peshawar, Swabi and Dera Ismail Khan districts have suffered heavy financial losses.