News
Wednesday, June 08, 2011
Talks among provinces on agri income tax fail* Punjab, Sindh, KP support a uniform rate of agriculture income tax
* Balochistan says separate rates be proposed for all provinces
By Sajid Chaudhry
ISLAMABAD: Forthcoming provincial budgets are not likely to have some measures for improving the collection of the agriculture income tax in all four provinces as the crucial talks among the provinces on increasing the collection of agriculture tax failed at the Ministry of Finance.
The ministry proposed to the provinces to increase the agriculture income tax rate from 1.5 percent to 2.5 percent in 2011-12, 3.5 percent in 2012-13 provincial budgets, and its increase to 5 percent by 2013-14, the third fiscal year. However, the provinces informed the Finance Ministry that they would examine the issue in the meetings of their respective cabinets, official sources said.
The provinces opined that the agriculture tax was a provincial subject and the federal government should not intervene in it.
Increase in the rate of agriculture income tax was not supported by the provinces.
Punjab, Sindh and Khyber Pakhtunkhwa were of the view that there should be a uniform rate of agriculture income tax, however, Balochistan was of the view that separate rates should be kept for all four provinces, the sources said.
Prime Minister Yousaf Raza Gilani had constituted a high-level committee, headed by Federal Finance Minister Dr Hafeez Shaikh and provincial finance ministers as its members. The issues that were to be decided included possible increase in the rate of agriculture tax, keeping the tax rate at uniform level in all four provinces, uniform assessment mechanism and tax collection strategy with maximum facilitation for the taxpayers of the agriculture sector.
Tuesday’s meeting of the committee was tasked with discussing the proposed measures for increasing the tax collection from agriculture income tax already imposed in the provinces. The decisions that were to be reached at the meeting were to be incorporated in the provincial finance bills of the provinces and were to be announced in the forthcoming provincial budgets.
Khyber Pukhtunkhwa Finance Minister Humanyun Khan was of the view that there should be one rate of tax, collection should remain with the provinces and KPK would not like to empower the federal government to collect the tax. He, however, said that increase in the revenue was necessary for all the provinces. He also said the KPK was a war-torn area and there was a reduced agricultural activity in the province.
Punjab Senior Minister Zulfiqar Khosa informed reporters that it was the first meeting of the committee and no decision could be taken. He was of the view that proposals that had been submitted in the meeting would be brought into the notice of the Punjab chief minister, and said the matter would also be discussed in the provincial cabinet meeting.
Balochistan Finance Secretary Dostain Jamaldini said that there should be a separate rate in each province in view of their agricultural activities. He also held that last year’s floods had badly damaged the agriculture sector in the province, adding that the farming community was not able to take further burden. Recovery would take some time and the prime minister had announced relief for the farming community, he added.
Courtesy www.dailytimes.com.pk