Budget reactions: Sindh’s agricultural tax targets mocked

Experts agree that target is too low, shows lack of will.

KARACHI:

Economists and analysts have described the Sindh government’s efforts to collect the agricultural tax as weak-willed and insufficient.

“The tax collection target of Rs427 million from agriculture income is itself a joke. This figure should have been in billions of rupees,” said Muzammil Aslam, an economist at JS Global Capital. “This tax target is a drama and it is just to fool this nation and nothing more than this.”

The Sindh government is targeting Rs427 million in tax collections from agriculture income in fiscal year 2012, up 34% from Rs281 million collected last year. Aslam estimates that the Sindh government should be able to collect as much as Rs36 billion in tax revenues from the agriculture sector, far higher than its current targets.

“This half-hearted approach of the government shows that they have decided to run this country on foreign aid or on tax collection from the salaried class,” Aslam said.

At a post-budget press conference on Saturday, Sindh Finance Minister Murad Ali Shah said that the Sindh government wants to improve its mechanism for agricultural income tax collection.

Shah admitted that the agricultural tax is not collected properly and even went as far as saying that tax collection on agriculture income has actually been decreasing every year. “I don’t think that government would be able to collect Rs427 million this year,” said Muhammad Sohail, CEO of Topline Securities, a brokerage firm. “The reason is clear that I don’t see any change in government approach towards tax collection.”

People were expecting a new approach from Sindh government in this budget to improve agriculture income tax, but it was evident from the budget speech that government is not serious in improving the situation we are in, he said.







Published in The Express Tribune, June 12th, 2011.