PESHAWAR: The tax collectors in Khyber Pakhtunkhwa have managed to collect Rs20.91 billion during the first 10 months of the current fiscal against the year’s downwardly-revised target of Rs32.46 billion, the budget documents reveal.

For the third year in a row, tax collectors have been struggling to achieve their targets in vain.

The documents presented before the provincial assembly on Wednesday revealed the provincial tax machinery’s sluggish performance which has even failed to achieve downward revised tax estimates.

The documents show that the province managed to receive Rs20.19 billion during the first 10 months of the year until April against the revised target of Rs32.46 billion.

The initial budget estimates had pitched the province’s tax receipts at Rs49.5 billion. However, the figure was later downwardly revised to Rs32 billion.

Of Rs49.5 billion, the province’s own tax receipts were projected at Rs18.17 billion and non-tax receipts at Rs31.33 billion.

In the revised estimates, tax receipts were not revised downward. However, the non-tax component was reduced by more than 50 per cent to Rs14.23 billion. It is highly unlikely that the tax machinery will meet the remaining target of around Rs12 billion during the remaining three weeks of the current fiscal.

Of year’s revised target of Rs32.46bn, only Rs20.91bn collected in first 10 months

The budget documents show that the last time when the tax machinery achieved its target was back in the 2013-14 when it managed to reach the target of Rs20.65 billion. In 2014-15, the tax collection stood at Rs22.70 billion against the revised estimates of Rs30.40 billion.

In 2015-16 when the provincial government went for an ‘audacious’ Rs54.42 billion tax collection target, the departments hardly managed to collect less than half of the initial target. The actual collection stood at Rs25.57 billion for the year.

Apparently, the sluggish performance of the tax machinery forced the provincial government to lower its tax target for 2017-18 as compared to the current year.

The tax target for 2017-18 has been set at Rs45.21 billion, including Rs22.30 billion tax receipts and Rs22.9 billion non-tax receipts.

The general sales tax on services contributes as the single largest source of taxes with the projected collection of Rs13.65 billion.

However, finance minister Muzafar Said told the assembly in budget speech that the government was committed to increasing its revenue base in the aftermath of the provincial autonomy.

He claimed that its four-year tenure, the government-owned receipts had gone up to Rs89.20 billion due to the government’s efforts.

The minister said the previous government managed to collect Rs33.40 billion only during its five-year term in office.

He said the current government’s tax collection was 157 per cent more than the previous government’s. The minister said the government had set up the KP Revenue Authority and that the number of taxpayers in the province had progressively gone up over the years.

He said the service tax revenue, which stood at Rs4.2 billion in 2012-13, had reached Rs10 billion.

“To improve tax collection and increase the number of taxpayers, the KP government is set to increase the number of tax facilitation centres,” he said.

On the other hand, the government has increased the tax ratio on property, professionals and businesses through the Finance Bill, 2017.

Through an amendment to the law, tax on CNG stations and petrol pumps with convenience stores has gone up from Rs15,000 to Rs25,000 and on those without stores from Rs7,500 to Rs11,250.

Also, the tax on service stations has been increased from Rs15,000 to Rs20,000.

The government has also amended the Finance Act, 2013, to include the ride hailing services in taxable sectors.

The government has increased five marlas house of A category to Rs1500, over five marlas Rs2,500, over 10 marlas Rs3,300, over 15 marlas Rs4,800, over 18 marlas Rs15,000, over 20 marlas Rs22,500, over 30 marlas Rs30,000 and over 40 marlas Rs45,000.

The finance bill proposes to levy from Rs330 to Rs1,000 on people earning over Rs10,000-Rs500,000, while for the government employees Rs100 on BPS-5 to 12 has been proposed while BS-20 and above would be pay Rs2,000.

The professional caterers will pay Rs15,000, travels agents and Haj operators Rs8,000 to Rs15,000, wedding halls Rs30,000, dentists and doctors from Rs15,000 to Rs20,000, diagnostic centres Rs7,000-20,000, petrol, diesel and CNG stations Rs12,000, money changers Rs10,000, fitness centres and gyms Rs1,000, departmental stores Rs10,000, cable operators Rs10,000, wholesales Rs10,000, chemists Rs10,000 and tailors from Rs2,000 to Rs10,000.

Published in Dawn, June 8th, 2017