LAHORE – A spokesman of the Punjab government on Saturday refuted Federal Finance Minister Abdul Hafeez Sheikh’s recent statement that in the last fiscal tax collection increased by 22 per cent in the country except in Punjab and that the Punjab government should be questioned on this count.

The spokesman said the finance minister’s statement was not based on facts. “Because of lower transfer of funds to the Punjab government by the federal government in FY11, the tax collection ratio was less than the services of the Punjab government. Had the federal government transferred the whole amount of sales tax to the Punjab government, collected on the services of the provincial government, the tax collection of the provincial government would have considerably increased,” he clarified.

The spokesman said the estimated tax collection of the Punjab government in FY11 was Rs48,609 million, while the actual tax collection stood at Rs44,625 million. The same figure for FY10 was Rs35,674 million, so the growth rate of tax collection remained 25.1 per cent in the last fiscal, he held.

“Likewise, the tax collection through the Federal Board of Revenue (FBR) and the federal government for the provincial tax was estimated at Rs39,909 million, while the actual tax collection stood at Rs26,813 million. The same figure for FY10 was Rs33,988 million, so the growth rate of tax collection remained minus 21.1 per cent in the last fiscal,” he claimed.

“The total collection of the two taxes was estimated at Rs88,518 million, while the actual tax collection stood at Rs71,438 million. The same figure for FY10 was Rs69,662 million, so the growth rate of tax collection remained 2.5 per cent in the last fiscal,” the spokesman stated.

Sharing the details, he said the tax collection by the Punjab government had been divided in two major categories. “The first category comprises the taxes collected by the Punjab government primarily through the two major tax collecting departments: the Board of Revenue, and the Excise and Taxation Department. The second category comprises sales tax on services, which is a provincial tax collected by the FBR until June 30,” he said.

The spokesman said the tax collection by the provincial departments in FY11 grew by 25.1 per cent over the previous fiscal. “On the other hand, the federal government transferred only Rs26,813 million to the Punjab government in FY11, compared with Rs33,988 million in the previous fiscal. Hence the collection on account of sales tax on services recorded a negative growth of 21.1 percent. Because of lower transfer on account of sales tax on services by the federal government in FY11, the overall taxes show a modest growth of 2.5 per cent,” the spokesman concluded.