Punjab is the most populous [110 million people] province of Pakistan with largest resources and budget size after the Federal Government, and beneficiary of lion’s share [this year estimate is Rs. 1.6 trillion] from National Finance Commission (NFC) Award. For the last many years, the performance of this province in tax collection is extremely unsatisfactory. According to a report, the Punjab government “seems to be faltering in its effort to boost the provincial tax receipts, raising concern over its ability to achieve the budgeted tax revenue target of Rs. 294.9 billion” for the current fiscal year. The Punjab managed to collect only Rs. 104.6 billion in the first half of 2019-20 that is barely 35.5% of the target for 2019-20. Collection as compared to the corresponding period of last year was over 11.8%, marginally less than the average inflation rate of 12% for the period. It exposes the tall claims of the government of coalition government of Pakistan Tehreek-i-Insaf (PTI) in Punjab since assuming power in August 2018 that it would substantially increase tax receipts! The performance so far shows that it is falling short of even paltry fixed targets!! It is worth mentioning that during the last two fiscal years prior to the PTI-led Punjab government, the average collection in the first half usually constituted 40-42% of the annual targets. The concerned officials like always are shifting blame of their incompetence and inefficiency on what they call “widespread economic slowdown”. It is obvious that shortfall in provincial taxes coupled with reduced amount from NFC Award(as Federal Board of Revenue registered gap of Rs. 387 billion in the first seven months) is going to hamper every area of economy. There is a strong likelihood that the Punjab would not be able give the promised cash surplus of Rs. 233 billion shown in the federal budget by Islamabad to meet the consolidated budget deficit for the year under the $6bn bailout package from the International Monetary Fund (IMF). In the wake of Eighteenth Amendment, the fiscal management, both at federal and provincial levels needs fresh thinking. The federal government, having all buoyant and broad-based taxes is not tapping the real tax potential and country is heavily indebted Official figures show that the Punjab in the first half of 2019-20 spent less than 30% or Rs. 103.1 billion from already truncated annual development programme of Rs. 350 billion.While announcing the budget for 2019-20, it was claimed: “In a major break from the past, the present Government has adopted an aggressive resource mobilization strategy for next financial year. Revenue mobilization measures suggested in the budget include proposal for revision in the rates of land based Agricultural Income Tax (AIT). The rates were last set in 2001. In the income mode of AIT, the exemption threshold has been proposed to be raised from PKR 80,000 to PKR 400,000 to bring in greater horizontal equity in our taxation system vis-à-vis taxation of non-agricultural income. Revenue mobilization proposals pertaining to Urban Immovable Property Tax include: 1) extension of rating areas to bring commercial and residential properties along highways/main roads into the tax net; 2) expansion of rating areas to align actual city boundaries with existing rating areas; and 3) fresh survey of properties in Punjab as well as update of valuation tables. More services are being proposed to be brought to the net of sales tax on services. The Government is actively considering shifting from a positive list of taxable services in GST on Services Act 2012 to a system of negative list that will tax all services except those explicitly exempted by the law. This reform will, however, be finalized during the next financial year. In order to increase fiscal space available for service delivery initiatives, another priority area for the new Government has been the rationalization of untargeted subsidies. Similarly, a number of user fees have been proposed to be rationalized to generate more resources for the Government. Altogether the resource mobilization efforts are estimated to result in generation of additional resources worth PKR 24.9 billion in FY2019-20”. This is the same old story repeated every year. First make tall claims and then perform poorly. There is no will to tax the rich absentee landlords and owners of posh bungalows and farm houses. In the wake of Eighteenth Constitutional Amendment in 2010, progressive taxes e.g. wealth tax and capital gain tax on immovable property, estate duty (known as inheritance tax in the West) and gift tax are with the provinces but the Punjab like other provinces have shown no interest in levying these taxes. Meagre collection of agricultural income tax proves this point-in fiscal year 2018-19 even the target of Rs. 1.650 billion was not achieved-the actual collection was just 1.100 billion. The current year target of Rs. 2 billion is much below the actual potential but the rich agriculturist lobby sitting in the Punjab Assembly is not ready to pay the due taxes. For years, the Punjab Government did not bother to study Reforming the Urban Property Tax in Pakistan’s Punjab, done by Development Policy Research Centre (DPRC) of Lahore University of Management Sciences (LUMS) that could have brought extra tax of Rs. 100 billion. The PTI Punjab government, like its predecessors, has not undertaken fundamental reforms to merge three tax departments, namely, Punjab Board of Revenue, Excise & Taxation Department and Punjab Revenue Authority. These could have been merged into one to provide one-window facility to the citizens, avoid duplication of expenses and ensure efficient and better collection, but no such effort has been made though during election campaign promises to this effect were made. The PTI Punjab Government, while not taxing the rich and mighty, is keen to get more tax from service providers that they conveniently pass on the same to the end users – this is a regressive tax, whereas we need more from the rich class for economic growth of Punjab that is essential for the entire country due to its size and share from NFC Award. The need is to go for harmonised sales tax on goods and services and its collection through a single national agency. The complete blueprint of this model is provided in ‘Towards Flat, Low-rate, Broad & Predictable Taxes’ [PRIME Institute, 2016]. In the wake of Eighteenth Amendment, the fiscal management, both at federal and provincial levels needs fresh thinking. The federal government, having all buoyant and broad-based taxes is not tapping the real tax potential and country is heavily indebted. On the other hand, provinces, which are almost entirely dependent on the NFC Award, have failed to raise their own sufficient resources for the needs of the ever-growing population. In the given circumstances, we need to through democratic process, establish an autonomous tax collection agency, manned by All Pakistan Unified Tax Services. The working of this body can be discussed and finalised under Council of Common Interests [Article 153] and its control can be under National Economic Council [Article 156]. The provinces must participate in national tax policy and collection apparatus as their share in NFC Award is larger than federal government. This new model with simplified and low-rate taxes can ensure economic growth as well as the much-needed ease-of-doing business climate to existing and future investors. The writer, Advocate Supreme Court, is Adjunct Faculty at Lahore University of Management Sciences (LUMS)