PESHAWAR: A review of the local body system in the province has declared the district governments’ failure to generate revenue alarming.

The review titled as ‘An Assessment District Government System in Khyber Pakhtunkhwa’ was undertaken by the provincial local government and rural development department with the assistance of the Sub-National Governance Programme.

The review report has assessed the system introduced in the province by the Pakistan Tehreek-i-Insaf government in 2013 against several benchmarks as provided in the laws and rules.

“There is an alarming situation regarding revenue generation as almost all districts showed unawareness and ignorance to a very important function that can expand the annual budget of a district government manifold,” it noted.

Report points out almost all districts showed ignorance to this crucial function

The report said the provincial government had failed to frame the model tax schedule as laid down by Section 43 of the KP LG Act, 2013.

It added that the failure to come up with such mechanism had left the district governments incapable of levying any new tax or collect taxes on agreed rates.

“It is recommended that such a schedule and guidelines for the local governments may be framed for levying the proposed revenue,” it said.

The report said though the Local Government Taxation Rules were approved in 2016, there was a lack of comprehensiveness as regard to revenue collection and its deposit in the designated accounts.

It added that the rules were silent about the appointment of the tax collecting officer.

“The district governments should identify additional sources to boost own resources under the law, while a proper mechanism for tracking collected revenue funds should be established,” it said.

The report also noted that almost all standing committees formed under Section 18 of the KP LG Act, 2013, were defunct compromising their basic task of monitoring the performance of local governments.

It said the law provided for the setting up of 13 committees, including standing, finance, district accounts, conduct of business and code of conduct ones and district and joint committees of village and neighborhood councils but a majority of districts had not notified them.

The report said the district councils approved bylaws for conducting the council’s business and meetings.

“In Shangla district, it has been noted that the model bylaws were amended to the extent of replacing the leader of the opposition with someone from the treasury benches to chair the district accounts committee,” it said.

Also four districts, including Charsadda, Dera Ismail Khan, Hangu and Torghar, have failed enact any bylaws.

The report said only Mardan, Peshawar, Lakki Marwat, Shangla and Kohat districts had designated enforcement officers to impose fines, while only Kohat and Mardan had managed to impose fines for offences.

About the release of funds to the district governments by the provincial government, the report noted that in 2016-17, the first tranche of funds was released on July 1 but the second and third tranches were delayed by three and two months respectively.

It added that not only the releases were delayed but they were also too little as in the first three quarters, only Rs6.6 billion of Rs21 billion were released.

The report also noted greater variations in the funds’ utilisation in the district and stated that Abbottabad, Bannu, Battagram and Tank districts failed to use even a single penny of their development budget by the end of April 2017.

About the development planning, it said political wrangling between treasury and opposition over funds led to litigations, which also disrupted the project cycle.

“There is a misunderstanding among district councillors regarding the distribution of development funds. The councillors assume that each will be responsible for allocating an equal share of the development funds, undermining the spirit of evidence based needs assessment,” it added.

Published in Dawn, November 12th, 2017