WEB DESK: The Finance Department of Khyber Pakhtunkhwa (KPK) has initiated reforms targeted towards improving service delivery, fiscal management and accountability through publishing a ‘citizen’s budget’ which is defined as assisting the non-specialists in understanding the budget documents and its linkage to the medium-term budgetary framework.
Upon taking over the provincial government, the PTI-led administration in KPK had also constituted sectoral co-ordination committees that focused on enhancing fiscal space for development as a forum for collaboration between revenue generating departments and development partners under the umbrella of Strategic Development Partnership Framework (SPDF). These are praiseworthy measures and indicate a genuine desire of the provincial government to facilitate an understanding of its guiding principles in terms of levying specific taxes, expenditure priorities as well as open avenues for timely course correction within the departments through the establishment of internal audit cells. In turn, these audit cells are envisaged as the eyes and ears of the Principal Accounting Officer in the department which in turn would enhance accountability.
In marked contrast to KPK’s initiative that must be applauded the federal government’s budget documents, under Finance Minister Ishaq Dar, have been an exercise in obfuscation for the past three years. This includes relocating items under the usual head to another to show better performance than is in fact the case.
The most blatant example of this was in the budget documents of 2014-15 onwards when the Dar-led Finance Ministry took two major items from non-tax revenue notably the gas infrastructure development cess, a dedicated fund for development of gas pipeline projects including Turkmenistan-Afghanistan-Pakistan-India gas pipeline project and Iran-Pakistan gas pipeline project, and gas infrastructure development surcharge, amounting to a budgeted total of Rs 195 billion, under other taxes thereby enabling him to claim a higher tax-to-GDP ratio.
In other instances, the expenditure claims made by the finance minister in his budget speech are not in the budget documents – an example being the subsidy of Rs 36 billion for urea and Rs 10 billion for DAP announced in the budget speech which was to be shared equally between the federal government and the provinces.
Thus the amount of Rs 23 billion, the federal share of the subsidy for fertilisers, is not indicated in the budget at a glance document in the subsidies section.
Another way to exaggerate government revenue in any given year with the objective of understating the fiscal deficit, a requirement during times when the country is on an International Monetary Fund programme as its ability to meet the deficit target would determine whether there is a tranche release, is to release gross as opposed to net taxes collected. This practice in all fairness is not Ishaq Dar-specific and it is by now a standard operating procedure for the Federal Board of Revenue to insist on advance tax collections from large taxpayer units as well as not releasing the refunds due to the productive sectors to show higher than actual tax collections for any given year.
One can only hope that in the spirit of transparency and accountability such practices are abandoned by the federal finance ministry and a citizens’ budget be released also at the federal level. However, given that some of the measures that promote confusion were deliberately adopted by the Dar-led Finance Ministry any chance of a citizens’ federal budget is extremely remote to say the least.
Source: Business Recorder