May 25, 2007	Friday	Jamadi-ul-Awwal 08, 1428

PESHAWAR, May 24: The NWFP government would not be able to achieve the overall collection targets of the provincial own receipts (POR) set at the beginning of the current fiscal year (2006-07), officials said.

Officials at the finance department told Dawn that the provincial government had set a target of Rs5.2 billion for the POR. The overall recovery trend shows that it was likely to miss the target with a margin of at least Rs200 million.

The failure of the tax collecting agencies in achieving the targets may put the provincial government in a difficult position vis-à-vis the World Bank. The international lending agency is sponsoring the Provincial Reform Programme (PRP-II) with a $130 million worth of Development Policy Credit, due for the next financial year (2007-08).

Under the PRP-II the provincial government has to increase POR by 13 per cent besides enhancing the user charges at a ratio of 25 per cent with effect from the current fiscal year, the officials say.

The Rs5.2 billion target for POR in the current fiscal year has been bifurcated into two categories of Rs2.458 billion as tax and Rs2.741 as non-tax revenues.

Taxes on motor vehicle, registration, property, profession, trade, entertainment, excise, hotel and tobacco development cess etc. form the tax-revenue component of the POR. The Excise and Taxation Department (E&TD) has a lead role in collection of direct and indirect taxes.

According to the officials, the E&TD has been assigned a target of Rs1.4 billion against such taxes in the current fiscal year, which is not likely to be met.

A senior official at the E&TD has conceded that the prime tax collection agencies at the provincial level finding it difficult to achieve such targets, as during 10 months of the current fiscal year it could collect only about Rs1 billion.

Keeping in view the overall recovery trend, the provincial government recently revised the target for the E&TD to Rs1.32 billion by deducting Rs80 million from it, the official said.

Last year too the department missed revenue targets, as against Rs1.208 billion it collected Rs1.182 billion in such taxes.

The official attributed exemptions given in property tax to the owners of residences of 5 marla and less and industrial units for a period of five years as the main reason behind the shortfall.

The ongoing stand-off over the collection of professional tax between E&TD and the cantonment boards was also hampering the efforts for widening the tax base, he explained.Like the E&TD, the Board of Revenue (BoR), which is responsible for the collection of agriculture income tax and land revenue, seems unlikely to achieve the targets, the officials said.

The provincial government had assigned the (BoR) a target of Rs75 million and Rs380 million for collection against agriculture income tax and land revenue respectively for the current fiscal year.

However, the officials said, actual receipts by the end of fiscal year will remain below the targets mainly because of exemptions given under the Agriculture Policy.

The BoR last year too missed the recovery targets and collected only Rs50 million against a target of Rs75 million, according to the officials.