May 03, 2008	Saturday	Rabi-us-Sani 26, 1429

KARACHI, May 2: Since the introduction of the agriculture income tax in the province in 1994-95, its collection has shamefully been dismal in the province.

The agricultural income tax collection declined by more than five per cent in Sindh during the last five years between 2002-03 and 2007-08.

An official document -- Budget Analysis: 2007-08 -- reveals that the Board of Revenue, Sindh, collected Rs232 million in 2002-03 which came down to Rs221 million in 2003-04 and further down to Rs197 million in 2004-05 and finally touching Rs198 million in 2005-06.

The 2006-07 budget estimated recovery of Rs450 million of tax from zamindars, but the revised estimates put the amount at Rs350 million. There are no figures of actual collection in 2006-07 and the board projects a recovery of Rs450 million in 2007-08. Sources said a majority of the rural gentry, having a political clout, do not pay taxes on their income, and it was the reason that the agriculture income tax collection was dismally low. But more reprehensible and shameful is the role of Sindh Board of Revenue that continues to deny small farmers of Sindh ownership documents and passbooks that may give them access to banks for credits and liberate them from the stranglehold of the money-lenders from the tribes of Shylock that charge more than 100 per cent interest on tied loans.

An official in the Sindh government disputed the agriculture tax collection figures and said all these are doubtful.

The official further stated that not only the agricultural income tax, but other levies, like water rate, local cess, drainage cess and land revenue, have never been collected to their full potential.

The assessment of taxes is being made by a patwari who remains the lynchpin of the entire system.

The Sindh Board of Revenue showed a recovery of only Rs0.4 million in 1994-95 when agricultural income tax was introduced. In the next year, recovery was a little better at Rs21.7 million after a lot of noise from residents of Karachi and Hyderabad as the provincial excise and taxation department had levied a surcharge and super charge on urban properties.

But much more distressing is the process of issuance of passbooks to small farmers.

As many as 220,000 farmers of the province are still without passbooks, or have been issued bogus passbooks. As a result, the share of Sindh’s farmers in bank credits came down from 21 per cent in 2001-02 to hardly 10 per cent in 2006-07.

At a meeting of the Agricultural Credit Advisory Committee in July last year, an official of the Board of Revenue had promised to issue 20 passbooks every month in every district.

“At this rate, it will require several years to issue passbooks to all farmers,” the SBP governor is quoted to have said in the meeting who suggested an effort on war-footing.

A project to computerise all land record of the province is on for last many years without showing any results. The idea was to get rid of ‘patwaris’ once and for all if all records are computerized, as there would be no need to refer to the manipulated and tampered records of hand-written books.

“The Pakistan People’s Party will have to address the issue of improving collection of taxes from the big zamindars and provide ownership documents to small farmers to give them access to bank credits and also to empower them,” an activist of the party said in Karachi.

“The MQM will not only be a coalition partner of the PPP government in Sindh but an active agent to reduce the clout of big zamindars and empower small farmers,” he warned. As indications are, the provincial government is bound to explore new avenues for revenue, mostly in urban areas, and under MQM pressure, the PPP would have to bring big landlords into the tax net.

In fact, political analysts believe that both the PPP and MQM can be in a contest to secure support of the poor and disadvantaged classes in rural areas of Sindh.