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LAHORE: Punjab is developing database and putting in place efficient systems to tackle problems in the way of proper implementation of tax on agriculture income from 2017-18.

“We are working on it – developing mechanisms and putting in place efficient systems – to levy the tax on agriculture income,” provincial Finance Minister Ayesha Ghaus Pasha told a post-budget press conference on Tuesday.

The province expects to achieve only 60 per cent of the target of Rs2.3 billion set for tax on agriculture income this year. The target for the next fiscal year remains unchanged.

The provinces, especially Punjab and Sindh, have drawn a lot of flak over the past few years for their failure to effectively tax agriculture income.

In answer to a question, she said the provincial government was improving tax administration and automating the systems to bring transparency and ease for taxpayers and to spike collection of provincial taxes and levies.

She said the provincial tax policy aimed to tax the untaxed and under-taxed sectors of the economy instead of increasing the burden on the existing taxpayers.

Punjab is targeting to collect Rs184.4bn in tax revenues next year, up by 15pc from the original estimates of Rs160.6bn for the outgoing fiscal year. Its tax collection fell by just less than Rs10bn, or 6pc, to Rs150.8bn this year, according to the budget documents for 2016-17.

The minister, who took pride in allocating just below 40pc, or Rs550bn, of the provincial budget (of Rs1.452 trillion) for the next year, said it was in line with the provincial government’s ‘strategic thinking’ of creating jobs and woo private investment in the province.

She repeated the details of the budgetary allocations for different sectors, saying agriculture, clean drinking water and social sector remained priority areas for the Punjab government.

In response to a question, she said the provincial authorities had taken up the issue of non-payment of net hydel profits to the province. “The federal government has reached an agreement with the Khyber Pakhtunkhwa government and we are demanding our share of the net hydel profits according to that deal,” she added.

Punjab has been pitching net hydel profits as a resource in its non-tax revenues for more than one and half decades, but the federal government is yet to pay a single rupee to it on that count.

The provincial government had pitched Rs21bn as net hydel profits in the budget for the present year. The amount has been raised to above Rs47bn, including arrears of around Rs37bn in the next year’s budget.

Avoiding a direct answer to the question if she had an alternate plan to offset the impact of the shortfall in provincial revenues in case Islamabad didn’t pay the net hydel profits even next fiscal year, she said it was a constitutional right of the province.

The minister also avoided a direct answer to the impact of the federal requirement to produce a budgetary surplus of Rs175bn during the next fiscal year on the provincial revenues and its development expenditure targets.

“We will not compromise on our development programme and growth in the province (under the Growth Strategy 2015-18).”

Nor did she say anything on the focus of the provincial spending on large infrastructure projects in Lahore and other cities in the central and northern parts of the province at the cost of development in the impoverished south Punjab.

Published in Dawn, June 15th, 2016