SINDH suffered a serious shortfall of Rs750 million in revenues from agriculture income tax during the 11 months (July-June) 2011-12. The collection from farm income tax (land tax+ water tax) stood just at Rs200 million against a target of Rs950 million.

A finance department source attributed the shortfall to natural calamities like floods and heavy rains which hit the province during the last two consecutive years.

He ignored the fact that farm incomes have gone up enormously after the increase in support price of wheat.

The scant contribution to national revenue by big landlords endorses the claim of industrialists that the government of big landlords dominating the National Assembly is reluctant to tax agriculturists, putting disproportionate burden of taxes on industry.

A finance department official said the department was not satisfied with revenue collection efforts especially in the domain of farm income tax by the Board of Revenue (BOR). He said the provincial governments were working on a system to improve revenue from farm income tax. The homework had been completed and a new collection model would be launched shortly.

Sources in the department criticised the revenue performance of the BOR which is also responsible for generating revenue from stamp duty, transaction of properties tax, and capital value tax (CVT).

There is a plan to improve the BOR working on modern lines to bring its efficiency at par with the Excise and Taxation Department and the newly constituted Sindh Revenue Board which is responsible for collecting general sales tax on services.

The tax revenue collected by BOR fell short by Rs3.5 billion to Rs7.4 billion against a target of Rs10.9 billion. According to figures released by the finance department, the total tax receipts of the province stood at Rs46.2 billion against the estimated tax revenue of Rs54.9 billionduring July-June 2011-12. The GST on services fetched Rs21 billion against a target of Rs25 billion during the period under review. The tax revenue collected by the Excise and Taxation department stood at Rs21 billion against a target of Rs22.8 billion.

In order to streamline the collection of tax revenue, the finance department has decided to introduce SAF-r3 system which would ensure monitoring of collection efforts made by revenue officers of different departments. Under the system a separate code will be allotted to each revenue officer. The challan of the revenue deposited in the Treasury through the National Bank of Pakistan will carry the code of the particular revenue officer which would reflect his performance.

The efficiency of a revenue officer adjudged through SAF-r3 would reflect in decisions about his promotion and transfer to a non-revenue post. “There is no justification of spending Rs2 million on salary and perks of a revenue officer if he collects only Rs0.2 million in a year,” the official quipped.

The SAF-r3 system introduced in Khyber Pukhtunkhwa province last year has been a success and has resulted in 20 per cent increase in revenue. This has prompted Sindh and other provinces to adopt the system.

Giving Sindh’s revenue projections for 2012-13, the finance officer said it was at Rs96.6 billion for province’s own tax and non-tax receipts.