PESHAWAR, Oct 12: Achievement of the Rs3.7bn provincial own receipts (PORs) target for the year 2003-04 seems to be a difficult proposition if the NWFP government does not adopt additional taxation measures to improve its revenue base.
Interviews conducted with some of the officials concerned revealed that the provincial government would need to bring about major changes in its taxation system and revise upward the rates of duties and taxes if it wanted to achieve the revenue target set under the tax and non-tax heads for the current year.
“Taxation measures contained under the current financial year’s budget seem to be insufficient as far as achievement of the Rs3.7bn PORs target is concerned,” a senior government functionary told Dawn.
Official sources said that in view of the past performance of the provincial tax collection machinery and the recently made changes in the rates of certain fees and taxes, the target being met appeared a distant possibility.
The lowering of the rate of registration fee and stamp duty in certain specific cases, added the sources, did not leave much hope either.
The province had raised a total of Rs3.48bn through PORs in the 2002-03 financial year against the annual target of over Rs3.6bn.
“The lending agencies who have been asking the NWFP to improve its revenue base are also cognizant of the fact that the target would be hard to achieve,” said an official.
The 2003-04 financial year budget estimates the PORs to improve by 15 per cent in comparison with the actual receipts recorded the previous year.
However, one of the finance managers of the province expressed the hope that the target was achievable “if every department gives its hundred per cent”.
The officer based his optimism on the improvement recorded during the last financial year in which PORs collection posted a 16 per cent rise in comparison with the level of recoveries recorded in the 2001-02 financial year.
Revenue generated under the heads of taxes improved by 13 per cent in comparison with the 2001-02 financial year whereas in the case of non-tax collection (user charges) the improvement registered was close to 22 per cent.
“Though in the 2002-03 financial year the provincial government managed to generated PORs more than the 2001-02 financial year, it could not meet the benchmark it was supposed to meet under the Medium Term Budgetary Framework — a document which forms part of the basis for its loan agreement with the World Bank,” said a source.
As per the MTBF, the provincial government is required to improve its provincial tax receipts by 10 per cent over and above the level of 2002-03 financial year. Moreover, 25 per cent increase is supposed to be achieved in the case of user charges — over and above the 2002-03 financial year’s level.