Support to Good Governance in Pakistan

Transcription

1 Support to Good Governance in Pakistan September 2016 David St. Davidsson Page 1

2 Support to Good Governance Programme (SGGP) The performance of selected areas of government for effective, transparent and responsive governance at national and sub-national level is enhanced. Planned Duration: Four Result Areas (components): - Local Government (KP) - Taxation (Federal, KP, Punjab) - Prevention of Violence Against Women (KP, FATA) - Statistics (Federal, KP, Punjab) Page 2

3 Sqm m people, of which half < 25 yo - HDI: 147/188 - Gender eq.: 121/155 - Culturally diverse - Somewhat of a troubled region Page 3

4 Tough Tax Situation - Over 90% of tax revenue collected by the federal Government (FBR) - Tax-to-GDP ratio between % - and has not really changed over the last ten years - Around 1 million people file tax returns - Lack of capacities in tax administration - Some Corruption, mistrust, etc - Provincial taxes account for approx. 10% of provincial total receipts Page 4

5 Provincial Taxation in Pakistan Until recently, the major sources of own revenue at the provincial level were: - Urban Immovable Property Tax - Motor Vehicles Tax - Agriculture Income Tax - Stamp Duties Constitutional Amendment in 2010 (18 th Amendment): - Sales tax on services devolved to provinces Page 5

6 Limited Fiscal Autonomy of Provinces Revenue share in % Central Provincial Local Expenditure share in % Central Provincial Local Page 6

7 Implemented by Result Area Taxation Support no longer provided to federal administration, FBR Support provincial tax authorities in KP and Punjab - Excise, Taxation and Narcotics Control Dept. - Revenue Authority (recently established only to collect sales tax on services) Indicators: The number of active tax payers, that file their returns on a yearly basis has increased at federal level by X% Government and non-government actors discuss taxation topics on a yearly basis at a formalised round table (3 round table discussions) The number of registered tax payers for sales tax on services has increased in Khyber Pakhtunkhwa by 80% and in Punjab by 100% Page 7

8 What are the major general challenges? - Citizens are largely unaware of their obligations - Especially with the sales tax on services - Some lack of trust in government institutions, particularly tax authorities. - Weak professionalization of HR: staff rotation & placement, career development - Some resistance / unwillingness to implement revenue reforms (not universal though) - Lack of resources, insufficient infrastructure - Some ongoing disputes and coordination problems between different tiers of Governments Page 8

9 What makes our implementation challenging? - Frequent transfer of high level officers and decision makers - Security barriers and instability, especially in Khyber Pakhtunkhwa - Recruiting national advisors with the right qualifications - Taxation is an unpopular and sensitive topic Page 9

10 Opportunities with the revenue authorities - Brand new, semi-autonomous agencies - Unrestricted in their approach, including organizational structure - Already largest tax collecting agencies in the provinces in terms of revenue - Still understaffed - KPRA has no field offices yet and no enforcement - PRA only has four field offices and limited enforcement - State-Society Dialogue bringing the tax closer to home Page 10

11 Examples of interventions - Educating Withholding Agents, public and private - Outreach campaigns for provincial tax authorities, social media strategy - Funding and design of registration drives for sales tax on services - Develop audit capacities of tax officers - Facilitate coordination between Finance Departments and tax authorities on revenue targets - Internal audit guidelines to enhance transparency - Inter-provincial coordination and learning - Tax fairs (debate competitions, university lectures, etc..) Page 11

12 Positive Developments in Punjab Listed as Game Changer by Tribune magazine in One of two government institutions to comply with RTI Act (website) Page 12

13 The Beauty of Taxation! Page 13

14 Local Governance Programme (LoGo) Page 14

15 Strategy for new GIZ Local Governance Programme The new programme builds on the achievements of the SGGP, lessons learned and results will be used to further improve local governance in Khyber Pakhtunkhwa and Punjab Provinces Joint steering structures with partners shall be established Synergies through coordination with development partners Key Result areas: 1. Local Government institutions 2. Revenue Generation 3. State-Citizen Dialogue Targets of intervention: Government institutions Elected bodies Citizens Page 15

16 Some major workpackages envisioned within new LoGo programme in Revenue Generation - Audit and Enforcement capacities within Revenue Authorities (related to an indicator about active taxpayers) - IT strategy support for Excise and Taxation Departments - Internal Audit Units at tax authorities and FD - Expansion strategy of Revenue Authorities - Tax Facilitation Centers in the Province of Punjab (already approved by Government) - Taxpayer education and further outreach - Piloting of revenue generation at local government level (which is almost nonexistent as of now) - Vertical and horizontal coordination Page 16

17 Shukriya! Thank you. Page 17