PESHAWAR, June 2: NWFP government is likely to set Rs 60m revenue target under both components of its receipts’ head of Land Tax and Agriculture Income Tax for the 2003-04 financial year, according to official sources.

The target would be Rs 5m over and above the benchmark the last military-backed civil government of the province had fixed for the current financial year, ending on June 30, 2003.

Despite the fact that the provincial government is not likely to meet the receipts target set for the 2002-03 financial year, it is bound to raise the target under this head for the upcoming fiscal year in line with its loan agreement with the World Bank.

Interestingly, the benchmark being set for the 2003-04 financial year would be around Rs 10m less than the recoveries the province had recorded, during the 1998-99 financial year when agriculture income tax was applied across the board covering land holdings of all sizes.

However, the farm sector receipts recorded sharp decline during the last two financial years after the last military-backed civil government introduced a new piece of law doing away with the scheme of recovering agriculture income tax on the basis of acreage.

Official sources admitted that the new legislation failed to bring desired results for the province as far as improvement in revenue proceeds from the farm sector was concerned.

“ Target has been set at a level lower than the recoveries recorded in the 1998-99 financial year because of the new legislation’s incapacity to improve receipts,” a provincial government official said.

Critics of the new law said that instead of giving incentives to the owners of small landholdings the Land Tax and Agriculture Income Tax Ordinance, 2000, carried in-built loopholes  to facilitate the big landlords.

Sources attributed the shortfall recorded in the revenue receipts under the head of Land Tax and Agriculture Income Tax head to the negative impact received by the provincial agriculture sector because of the recent floods and natural calamities.

In its loan agreement with the World Bank - which is financing the NWFP’s provincial reforms programme - the last provincial government had committed to raise its recoveries under the Land Ttax and Agriculture Income Tax head during a four year financial period starting from the 2002-03 fiscal year.