As part of the 7th National Finance Commission (NFC) Award, all the four provinces were supposed to improve tax collection, but they fell behind their commitment to collect tax on farm income and real estate to improve the country’s falling tax-to-GDP ratio.
It was agreed in the award that all the provinces will supplement the centre’s efforts to increase the tax-to-GDP ratio to 13.60 per cent by 2012-13, but it actually ended up at 9.6pc for the same year, showing a dismal performance of the revenue realisation, suggested a report on Second Biannual Monitoring on Implementation of the NFC Award.
Moreover, nothing has happened on this account. But provinces are getting their enhanced share from the federal divisible pool as entitled under the 7th NFC award as against their commitment to increase tax-to-GDP ratio to 15pc by the terminal year 2014-15, which seems to be missed.
The land-holding elite in the four provinces never miss an opportunity to grab a seat of power, but at the same time they feel no shame on sitting on acres of agricultural land and earning millions from the harvest and yet paying nothing in taxes.
On agriculture income tax, the only province which took measures was the Khyber Pakhtunkhwa, while agriculture income tax was being harmonised in consultation with stakeholders in Sindh.
The report did not give any details about harmonisation and broadening of agriculture tax base in Sindh. The report was also silent on measures taken in the last years regarding agriculture income tax in the provinces of Punjab and Balochistan.
