PESHAWAR, Nov 24: Provincial departments and tax collection agencies have been directed to formulate measures for resource mobilisation. A circular issued by the finance department to administrative heads of provincial departments said the NWFP government was short of resources and it required concerted efforts to mobilise resources.
The departments have been directed to send taxation proposals for 2008-09 to the finance department for further processing. The outline for requisite information covers a number of areas.
The departments have been asked to identify areas for new taxes or fees, as well as revision of existing taxes and fees. Indication of existing rates in case of old taxes and fees, proposed taxes and fees with detail justification and details of tax base are also to be covered in the proposals.
The proposals will also contain information about the year or date when the last revision was made in existing taxes or fees, anticipated revenue estimates likely to be generated, the law governing the taxes or fees and changes that may be needed in existing laws or making new legislation.
The circular said that as per practice, increase in rates/fees is to be made after getting the approval of the chief minister. In future, all such proposals will be moved to the chief minister via the finance department.
According to officials, tax-collecting agencies of the NWFP government have been unable to generate revenue from its own resources and the declining volume of local resources for a couple of years has increased the province’s reliance on external resources.
They said trends of revenue collection, both tax and non-tax, during the last four years had shown a gradual decline in the contribution of provincial own receipts (PoR) to the overall resource pool of the province.
According to statistics, the provincial government had generated Rs4.047 billion from its own resources in 2002-03, which was about 10 per cent of the total Rs37.039 billion revenue receipts of the province.
The ratio of PoR contribution remained the same in the subsequent two years, but a steady decline was witnessed in the fiscal year 2005-06 when it dropped to almost seven per cent of the total receipts. In 2006-07, this ratio is said to have been eight per cent of the total receipts.
The government has set the PoR target at Rs6.981 billion for the current financial year. If achieved, it will not be more than eight per cent of the total revenue target of Rs80.579 billion.
The government has been claiming to have been focusing on revenue mobilisation through its multi-sectoral Provincial Reform Programme initiated in 2003 to reduce its dependence on external resources.
Under the reform strategy, the government was required to mobilise the revenue base through strengthening tax reform, accelerating and rationalising user chargers and improving tax administration, the officials said.
