PESHAWAR: Despite having repeatedly failed to realise its revenue targets over the last few years, the Khyber Pakhtunkhwa government has pitched the province’s own receipts in the next financial year at a massive Rs53.4 billion.

After holding lengthy deliberations and review of the local revenue system, the finance managers decided to revise the province’s own receipts from Rs34.64 billion for the about-to-end current financial year of 2018-19 to Rs53.4 billion.

The 2019-20 ambitious revenue target includes tax receipts of Rs39.70 billion, including sales tax on services of Rs20.354 billion, and non-tax receipts of Rs13.69 billion.

Budget 2019-20 to be unveiled on June 16

Finance minister Taimoor Saleem Jhagra will announce budget in the provincial assembly on June 16.

The provincial government has failed to achieve its revenue targets during the last few years. It had set the target of Rs45.2 billion (tax and non-tax receipts) for 2017-18 but that was later reduced to Rs34.25 billion

According to the budget document, the government set the revenue target at Rs41.26 billion for 2018-19. However, officials familiar with the situation say the revenue collection has fallen short of its target by April 2019 as only Rs24 billion could be generated.

The figure may show some improvement by the end of the current financial year but officials acknowledge it won’t get anywhere close to the target.

Asked how the government has planned to achieve the ambitious target given its own record of generating low revenue, an official admitted that it was a huge challenge but added that it was not impossible to meet.

Explaining the reasons behind the failure of the provincial government to meet its targets in terms of own receipts, he said the revenue targets were set without looking at ground realities.

The issue was further compounded by laxity on part of the administrative departments to make efforts to collect revenues.

Officials said the finance wing of the finance department had taken the revenue target as a challenge in order to revamp itself and improve coordination with administrative departments to increase revenue generation and ultimately increase the collection of province’s own receipts.

The resource wing, the official said, has made strenuous efforts to streamline the detailed object-wise head of accounts of tax and non-tax receipts and is able to complete the task in three months.

“Now, we know which revenue goes into which head,” he said.

For the first time, the official revealed, targets for the financial year 2019-20 has been set object-wise for each department completely in line with their actual receipts.

The three-month long exercise revealed that many departments such as labour, industries, public health engineering and irrigation had failed to perform well despite having huge revenue generating potential.

The official said the administrative departments were asked to provide resource mobilisation proposals for 2019-20 with a view to revise rates not enhanced or reduced for five years.

He said 22 of the 26 revenue collecting departments shared their proposals for revenue increase and of them, the proposals of 17 departments were recommended to the chief minister and cabinet for consideration.

Officials said they were confident that despite reduction and withdrawal of some taxes in transport and education and some other sectors, the department together with administrative departments and relevant revenue authority would be able to generate revenue and meet the target set for the next financial year.

Asked if the target set for the next financial year is not ambitious and if the government given its own track record of failing to achieve revenue targets is not putting too much faith in own departments and revenue authority in achieving the Rs53 billion revenue mark, the official replied, “the answers to all your questions is ‘yes, yes and yes’.”

Published in Dawn, June 5th, 2019