PESHAWAR, Dec 3: The newly-established Khyber Pakhtunkhwa Revenue Authority (KPRA) has attracted bureaucratic efforts to wind it up and waste the effort and donor`s money spent on its establishment, according to officials.

The recommendation to delegate the revenue authority`s functions to the directorate of excise and taxation came at a time when the new entity had not even become a properly functional body, said an official privy to the matter.

`The new entity has not completed its first six months, it has not got even on to its feet and a recommendation has been floated to wind it up,` said a knowledgeable official.

The revenue authority has been set to take Khyber Pakhtunkhwa general sales tax (GST) revenue receipts from Rs4.3 billion last fiscal to over Rs10 billion in next couple of years. The lead to set it up has been taken from Punjab and Sindh provinces who, according to sources, recorded multi-billion rupees increase in their GST on services` receipts within few years of their establishment.

The decision has started paying dividend to KP`s kitty as well. The province, said the excise and taxation (E&T) director general Mohammad Javed Marwat, collected Rs2.2 billion GST on services during the first four months of the authority`s establishment. The provincial government has set the GST on services target for current financial year at Rs6 billion.

According to official sources, the government has been proposed in an official summary to delegate the authority`s role of collecting GST on services to the director general E&T instead of having a separate entity.

If implemented, this would mean an end to the concept of having an authority independent of bureaucratic influence.

Work on establishing the authority began in the last provincial caretaker gov-ernment`s days. The United Kingdom`s Department for International Development looped in, arranging financial and human resources to set up the authority.

Later, Pakistan Tehreek-i-Insaf and its ally Jamaat-i-Islami, after coming into power, opted to continue with the concept. The coalition government enacted a provincial law in June this year following which the authority came into being from July 1.

`There is an opinion that if some retired servicemen of the Federal Board of Revenue are hired and placed with the directorate of excise and taxation this would be sufficient (instead of establishing a separate entity),` said Mr Marwat.

He, however, said the process to induct staff required for the authority, including the DG, was afoot and advertisements in the national and international newspapers had been published to recruit the staff.

Presently, the secretary E&T department, Khyber Pakhtunkhwa, is the DG of the revenue authority in his ex-officio capacity whereas the director general of E&T is the director administration. This arrangement is meant till a full-time DG is appointed to spearhead the authority`s work.

According to knowledgeable circles, the provincial finance department did not lend support to the idea of placing the authority`s role to the directorate of excise and taxation.

`The finance department opposed the suggestion by offering a dissenting note on the directorate`s summary,` said an official.

According to officials, the proposal to alter the plan, which would mean winding up the authority, has been put forward without giving a serious thought to the government`s position.

`How can you do that after making a foreign donor to provide you human and financial resources needed to set up a new entity,` said the official.The ill-conceived recommendation to wind up the authority could not have attracted a favorable response from the finance department after it spent a lot of effort on its establishment.

The decision to set up the revenue authority has been made in accordance with the 18th amendment passed in April 2010. The province has taken over the collection of GST on services (a provincial levy) previously done by the FBR, which charged one per cent against the amount it collected on behalf of the provinces.

Sindh assumed the GST on services collection in 2011 whereas Punjab relieved the FBR in 2012.

The KPRA, said an official, was a hybrid of the revenue authorities set up in Punjab and Sindh, where the revenue has recorded manifold increase. Khyber Pakhtunkhwa, too, anticipates significant growth over the next few years in GST on services receipts. The province can extend the tax net to hotels, restaurants, wedding halls, beauty salons, and certain services offered at private hospitals, according to officials.

Besides, the province can improve its receipts by streamlining the collection mechanism. A good amount of GST on services raised from KP, said an official, did not end up in the provincial kitty.

Private firms and commercial banks with their headquarters located in other provinces do not pay the Khyber Pakhtunkhwa government the GST on services they collect from the province.

`Since their head offices are in other provinces they make the payment to the authorities there and not to Khyber Pakhtunkhwa,` said an official. Such organisations include commercial banks, travel agencies, tour operators and commercial banks.

He said the KPRA was aimed at roping in the service providers and plugging leakages in the system by making firms to pay the tax to Khyber Pakhtunkhwa instead of the province where their headquarters were located.