PESHAWAR, Sept 17: The NWFP government’s recently adopted legislative measure to improve revenue under the provincial own receipts head of tobacco development cess by Rs50 million is likely to remain far from yielding the desired results, according to officials.

Under its current year’s budget, the provincial government had extended the scope of tobacco development cess to the open market transactions of tobacco, thereby farmers were required to pay cess at the rate of Rs2 per kg against the sale in the open market.

The collection of cess was to be materialized at the time of transporting tobacco from one district to another. In this respect, check points were to be established at the entrances of tobacco growing districts and a contractor had also been awarded contract to collect the development cess.

The finance managers had anticipated to raise Rs50 million annually through this measure in line with its commitment with the World Bank which financed NWFP government’s provincial reforms programme (PRP) in its first year of implementation, i.e. the financial year 2002-03.

However, under the NWFP Finance (third amendment) Ordinance, 2003, the provincial government introduced a new scheme of things undoing the earlier system, thereunder collection of tobacco development cess against the open market transactions was to be made at the time of transporting tobacco from one district to another.

The new piece of legislation has divided the tobacco growing areas into three zones putting an end to the collection of cess on the inter-district transportation of tobacco.

“The five leading tobacco growing areas of the province, including Charsadda district, Swabi district, Mardan district, Nowshera district and Dargai have been put in one zone, thus, marginalizing the scope of the new levy,” said a senior government functionary.

In view of the fact that cigarette manufacturing factories are also situated in these five areas, the open market transactions in these areas would, by and large, remain outside the ambit the new levy.

“The province is not likely to improve its revenue base to the extent it is eying on,” said a finance manager.

Insignificant amount of tobacco, said the officials, would get transported from one zone to another, hence the logic behind the earlier measure would end up far from bringing the desired results.