Islamabad - The software module, being developed on the directives of the Federal Board of Revenue (FBR), for the collection of Infrastructure Development Cess (IDC) in Khyber Pakhtunkhwa will be operational by May 15.

The module will help the KP government collect one percent cess from the trucks passing through the province.

The official documents, submitted to the Senate Standing Committee on Finance, reveal the decision was taken in a meeting between the FBR and the KP government officials, according to which the Board will provide requisite information technology platform to KP’s Revenue Authority for collecting the IDC through banks, situated in the province. The FBR has assured the standing committee that it is trying to resolve the matter with the KP government at the earliest.

A meeting in this regard was held between Member(Customs) FBR and Principal Secretary to the Chief Minister/Secretary Excise and Taxation, KP and Director General Excise and Taxation on March 25, 2016.

The KP government had introduced the IDC through its Finance Act in the financial year 2014-15, but the collection was delayed due to legal hurdles and pending permission from the FBR.

The collection process could also not kick off due to some technical problems as well. Now it is hoped the province will be able to collect the Cess in the new financial year, 2016-17.

The IDC had been imposed on trucks at a ratio of one percent, as per their weight.

The task of collection had been given to the Khyber Pakhtunkhwa Revenue Authority (KPRA). The KP government is estimated to collect Rs 7,000- 8,000/- per truck, under the IDC.

The FBR documents further disclose that the Directorate of Reforms and Automation (Customs) had been asked to develop the module for ensuring fast and smooth collection of the cess. In pursuance of the FBR instructions, module development process was initiated, which is in advanced stages in the Customs Computerised System, and will take effect by May 15, the documents disclosed.

However, the FBR had suggested to the provincial government in the beginning to impose IDC on trucks carrying local trade items, and spare the Transit Trade for the time being.

The traders of KP were against the imposition of the cess, as in their view, the step would negatively affect businesses in the province. It is pertinent to mention here that Sindh and Punjab are already collecting the cess.