Low volume: Law and order eat into K-P excise revenue

People register vehicles with other provinces, paying them relevant levies, fees

PESHAWAR:

The scars left behind by militancy are also affecting the revenue generated by the K-P Excise and Taxation department via vehicle registration.

“A negative impact on revenue generation was first felt around 2006 when the province’s security situation started taking a nosedive,” an official of the E&T department told The Express Tribune.

Shahnawaz Khan, a taxation analyst at the department said people of K-P started looking towards safer cities, particularly Islamabad, to get their vehicles registered. “Since then the revenue from vehicle registration has stopped showing a positive upward trend.”

Money in the wrong pockets

Under the K-P Motor Vehicle Ordinance 1965, a vehicle should be registered in the district where the owner lives, works or does business. And under the West Pakistan Motor Vehicle Taxation Act 1958, token tax is to be paid in the district where the vehicle is registered. Therefore token tax revenue goes to the cities where the vehicle is registered.

Even as the number of vehicles increased in K-P, revenue generation from the registration stagnated, explained Shahnawaz. “If we look at past tax collection and compare it with the number of vehicles on the roads in K-P, we will see the difference,” he said.

He added vehicles are registered in other provinces while their owners live in K-P. In essence, they use K-P’s infrastructure, but pay taxes to other provinces.

If a vehicle is transferred from other province to K-P then its token tax should be paid to K-P, but Sindh does not follow the policy, they charge the owners the tax because the original files lie with Sindh E&T office. “If a vehicle owner requests the Sindh E&T department for transfer of ownership they still ask for a token fee even if the payment is being made in K-P where the vehicle is in use.”

Shahnawaz added the owner is charged twice for token tax because Sindh does not accept the tax charged by K-P. “The number of vehicles registered in Sindh, Punjab or Islamabad is more compared to that in K-P.”

Way out

“The solution to the problem is to make changes in vehicle laws and share vehicle data across provinces,” he said. He added K-P E&T department has taken up the issue with the Council of Common Interest and it is on the agenda of the Inter-Provincial Coordination Committee.“If all provinces share vehicle data, theft would also be controlled.”

Shahnawaz added they have written to the Islamabad E&T department to stop the registration of vehicles with owners in K-P, but they have paid no heed. Islamabad police unnecessarily intercept vehicles from K-P, he said. “This is why people register their vehicles in Islamabad, to avoid undue harassment.”

Hayat Khan, a system analyst at the K-P E&T department said, “We have uploaded vehicle data on our website and we will soon upload information on vehicles not registered with K-P E&T department.”

YEARS                 MOTOR VEHICLE

                               TAXATION

                               (rupees in millions)

 

2005-06                 529.185

2006-07                 606.622

2007-08                 578.070

2008-09                 608.960

2009-10                 708.749

2010-11                 744.348

2011-12                 726.921

2012-13                 765.550

2013-14                 845.266

2014-15                 766.086

Published in The Express Tribune, October 24^th, 2015.