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Shift in Taxation Strategy in NWFP*Published by the daily Sindh Express, Karachi on May 31, 1990 The pre-budget speculations in the provincial capital speak of the provincial finance ministry being keenly bushy in calculating a new taxation strategy for NWFP? Accordingly it is to be less urbanized with a lot many rural characteristics. It is because the most revenue in the provincial exchequer is being collected from the rural agricultural areas. And that is where it sounds great. But in the over populated cities folks are saying that most of the provincial big guns hailing from the rural landed gentry so they will ignore the cities and will provide amenities to the far flanged backward rural areas. But the agriculturists themselves are worried for such an attention by the government. They say that now again they will be targeted to more taxes while providing new incentives to the industrialists. Yes, this is an interesting dilemma and agriculturists are correct in asking the pivotal question as when the industrialists would be able to shoulder their share of taxation. Since the governments have been giving a lot of incentives to help industrialize the backward NWFP economy and still the very practice is continued. But practically the change that was expected has not yet occurred and the already pressed agriculture sector is still shouldering the province economy. In this background the official in finance ministry have with the scribe during a chat said that certain new taxes would be reluctantly levied on the agricultural produce and arms licenses. The centers of recreations and leisure including restaurants would also be considered for taxation. Similarly the transport industry is going to be on the anvil and in this respect extra surcharge on the registration of vehicles is under consideration. All these steps are stated to be crating worth Rs. One billion of extra funds. Further the curbs on handicraft industries and cottage activities in the rural areas would be yielding our budget officers a boost of two billions. It is expected that the tourism industry that has been always treated as a white elephant would be given certain muscles fixing so to make it sufficient by itself. In this respect possibly the far flanged areas of tourist attractions for the foreigners would be introduced with a minimum of excise tax where in special liquors stores for non Muslim foreigners would be levied upon a minimum of surcharge tax which is to raise the income figure for the next financial year by a couple of millions of more rupees. Similarly it is also expected that the provincial government would be suggesting to introduce a formula that would mean to help recover its shares out of the federal and local bodies revenues. For the federal government the present provincial government has unleashed a warfare while on the local bodies it is said that province will share the octroi and business and trade taxes with the local bodies. However it is worth noting here that our local bodies has never recovered its due taxes from its own jurisdictions and the auditors reports to this effect is illustrative enough. However if a tuff strategy is adopted then this source might provide the province with couple of millions of rupees. Like always on the eve of the budget season every official is keenly looking around to find new but safer avenues to explore. But this time as the provincial chief minister has asked for the meeting of the council of common interests so to provide the province with its due from the accounts of the federal funds, a sign of relief is visible around the finance ministry. The pundits in the finance ministry have stated that since the Pandora box of CCI is not going to be unloaded soon and it will yet take time therefore within the next couple of months the NWFP will be receiving a federal grant for this budget. To them this grant will be above the level of 1987 and still to mention about the federal programs like Peoples works Program that would be help up for the local uplift. Though the Sherpao government is presently having a popular outlook and it can be easily handling the budget session still the question with regard to our near future would matter that Ask us if the present pace of bankruptcy and expenses taking over the income would ever be mended. To this effect the entire blame goes to the bureaucracy. In the present day finance ministry almost all the officials are those born after 1947. Hence Pakistani by birth they have a distinct taste of doing their duties. Unlike their predecessor the new blood is less efficient, less qualified and less trained. Most of them have come to the position via nepotism and that is how the entire scenario speaks about a bleak future? And that is where circles close to Sherpao said that chief is worried about all this and would like advisors from aboard to help him out! Frankly speaking he has many of them who stayed for longer time abroad during Zia's dictatorship but now PPP leadership would not take advantage of their experiences. Many are dubbed as anti Benazir and pro-Murtaza! The other worrying issue for Sherpao is the Federal incentives in respect of special development programs. Here the federal contribute would never rise above 14 per cent. And that is just nothing for poor pathans to rely upon. Because with 14 % from Federal government and 26 % raised by the province we will still be faced with a huge deficit. And here the ministry would be correct in looking towards some foreign aid. In first place it is thinking to introduce tax on all those vehicles that are in used for the Afghan refugees and their cause. Further the situation deforestation that started with the arrival of afghan refugees ten years ago would be remedied through foreign assistance. Be all means the coming budget happen to be a difficult one and had the provincial government decided to stand beside the masses and go slow in introducing new taxes, the future prospect of the economy of this province is gone to be bleaker. Still if Sherpao go for squeezing out money from the tax payers to keep the pace of development intact in the province then his popularity would be on stake. And that is what no politician would go for!
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