Punjab planning to collect taxes itself

[Lahore_Real_Estate]

* Provincial finance minister says move to be in accordance with former federal finance minister’s promise in NFC Award

Staff Report

LAHORE: Punjab is developing a mechanism for collection of tax on a provincial basis in accordance with former federal finance minister Shaukat Tareen’s promise to shift the tax collection rights to provinces in the National Finance Commission Award meeting, Punjab Finance Minister Tanveer Ahmed Kaira said on Tuesday.

Addressing a post-budget press conference at the CM’s Secretariat, he said that Sindh was pressing the federal government to shift the rights to collect tax to the province, adding that if this demand was accepted by the Center then Punjab would also collect its own taxes.

He said that 90 percent of the country’s sales tax revenue was generated from the telecom sector, out of which over 60 percent was being collected from Punjab. “Tax collection will be easy for Punjab and under the agreed NFC Award formulae, this year instead of five percent, we will pay only one percent charges to the Center for tax collection,” he said.

To a question, he said that 2010 would be the year of transition, as 26 departments would be transferred to provinces from federal control. “We have developed a system to get these department under provincial control. Shaukat Tareen had promised that the funds of these departments will also be shifted to the provinces,” Tanveer added.

When asked why the government was willing to continue the ‘Sasti Roti Scheme’ despite widespread criticism from within the cabinet and the opposition, the minister defended the project, saying that the opposition’s work was to “oppose everything”. He said the provincial cabinet had decided to continue the project and implement a plan to make it free of corruption.

To a question, he said no funds have been allocated for the model village programme this year because the project was not being run on merit and influential politicians had attained funds for their own villages instead of strengthening the programme itself.

Tanveer said the annual budget of the CM’s Secretariat and ministers’ salaries was estimated at Rs 45 million and Rs 17.86 million respectively, and that after a 25 percent cut, Rs 11.3 million and Rs 4.4 million would be saved respectively under each head.

When asked why adequate funds would not be shifted to districts even though the province was getting 56 percent of the NFC Award, the minister said that districts would get funds through the Provincial Finance Commission (PFC), which works just like the NFC.

He termed two projects of the Punjab government as “very important”, namely the subsidy for the purchase of solar water pumps for farmers and a liver transplant project, adding that instead of giving subsidy on purchase of tractors during the upcoming financial year, subsidy would be given to farmers for purchasing solar water pumps so that they can perform their activities despite load shedding.

Punjab Finance Secretary Tariq Mehmood, Planning and Development Chairman Javed Aslam and Adviser to the CM Sardar Zulfiqar Khan Khosa were also present at the press conference.