PESHAWAR, Aug 3: The NWFP government will include collection of professional tax from cantonment areas and extension of tax net to the Provincially-Administrated Tribal Area (Pata) in its recommendations for provincial autonomy to be forwarded to the Centre, officials said.

A high-level committee of the NWFP government, constituted for preparing recommendations on provincial autonomy, in its preliminary sessions took up both the issues and it would be part of the final report likely to be furnished by August 15, officials told Dawn here on Friday.

The collection of professional tax was one of the contentious issues between the provincial government and cantonment boards, which collected such levy from the cantonment areas contrary to the 1973 Constitution, they said.

For the settlement of such a long-standing dispute, the NWFP government twice moved the Inter-Provincial Coordination Committee (IPCC), but it never took up the matter.

They explained that Article 163 of the Constitution authorised the province to collect professional tax from areas falling under the jurisdiction of a cantonment area.

However, at the same time, an SRO of the Ministry of Defence issued on October 12, 2004, empowers the cantonment boards to collect such tax from the areas falling under its ambit under Section 60 of the Cantonments Act, 1924 (II of 1924), the officials said.

The officials said that the cantonment boards in the province were currently collecting the professional tax from traders and shopkeepers having business in these areas, while at the same time the Excise and Taxation Department (E&TD) was also demanding the same tax from them.

They said that the Excise and Taxation Department was annually facing a huge shortfall in recovery against the professional tax because of the controversy.

They explained that most of the business centres in urban areas of the province were located within the jurisdiction of cantonment areas that could contribute to the provincial kitty significantly.

Tax collecting agencies of the NWFP government were also trying hard to extend the ambit of a number of provincial taxes to Pata to expand its revenue base, but it was unable in doing so because of many legal implications, the officials said.

Areas falling under Pata, said the officials, were exempted from all types of provincial and federal taxes, and it has become a hub of non-custom-paid vehicles.

Rough estimates suggest presence of more than 80,000 non-custom-paid vehicles in Pata areas.

“We are recommending the federal government to allow the provincial government to extend provincial taxes to such semi-tribal areas so that it could widen its revenue base,” a senior official told Dawn.

The provincial government, he explained, also wanted the federal government to announce amnesty for regularising such non-custom-paid vehicles that would substantially contribute to the national exchequer and legalise thousands of illegal vehicles.

A recommendation to this effect would be part of the NWFP government’s report on the provincial autonomy, the official added.