Treatment of specific classes of receipt

5.6.1.1 This section outlines some of the specific classes of receipt in relation to their accounting treatment and any specific accounting procedures. It is not intend ed to be an exhaustive list of all receipts, as this may be obtained from the Chart of Accounts.

5.6.2 Consolidated Fund

5.6.2.1 Revenue receipts - direct taxes

• income tax - includes personal and company income taxes. The procedures for income tax assessment and collection, are regulated under the Income Tax Ordinance, 1979. Income tax receipts, shall be deposited at the State or National Bank of Pakistan, as set out in Section 5.5.2. Tax instalments deducted from employees’

salaries shall be paid by the employer into the State or National Bank, with receipt voucher, in accordance with the Income Tax Ordinance.

• property and wealth tax - includes taxes on wealth, capital value tax and tax on immovable property and land. The procedures for property and wealth taxes are regulated under the Wealth Tax Act, 1963. Similarly these amounts shall be deposited, with receipt voucher at the State or National Bank of Pakistan.

5.6.2.2 Revenue receipts - indirect taxes

• customs duty and excise - includes customs duty imposed on imports and exports and customs related fines, fees and penalties.

These receipts are normally recorded by Customs Treasuries.

Excises include Federal and Provincial excise duties on a range of products, commodities and services. The procedures relating to customs duty and excises are regulated by the Customs Act, 1969.

In all cases the amount of duty or excise shall be deposited, with a receipt voucher, at the State or National Bank (or Post Office, as the case may be).

• sales tax - applies to goods imported, exported or produced in Pakistan. Specific procedures, levies and exemptions in relation to sales tax is regulated by the Sales Tax Act, 1990.

• withholding tax - withholding tax on interest earned in bank accounts shall be deducted by bank, transferred to the Government bank account and included in the daily bank scroll. Where

withholding tax payable by contractors is deducted at source, this amount shall be deposited by the employer into the State or National Bank in accordance the regulations set out in the Income Tax Ordinance, 1979.

5.6.2.3 Revenue receipts - other income

• income from trading enterprises - the Government may obtain income from trading enterprises that it owns, other than dividends.

These include proceeds of excess wheat and other commodities, recoveries, subsidies (where realised in cash) and receipts from the sale/privatisation of trading enterprises.

• interest received - interest received is to be treated as Consolidated Fund revenue, at the time loans and advances are repaid, or upon encashment of Government investments.

• dividends received - where the Government receives a dividend from any trading enterprises in which it is a shareholder, this will be recognised as Consolidated Fund revenue when the interim or final dividend is received.

• proceeds from sale of stores and assets - proceeds from the sale of stores and surplus assets are to be treated as Consolidated Fund revenue, where the initial purchase was made from the

Consolidated Fund. If initial purchase was made from the Public Account the amount should be credited back to the relevant Public Account head. Sale proceeds should not be shown net of selling costs.

• grants and contributions received - any grants or contributions received by the Government, which results in an inflow of cash or cash equivalent, is to be treated as Consolidated Fund revenue.

However, if the Federal Government receives grant monies on behalf of a Provincial Government or other bodies, these monies shall not be treated as revenue in the hands of the Federal Government. (and vice versa).

• judicial receipts - refers to any fees, fines or penalties levied by the civil and criminal courts, arising from the judicial process. These receipts shall be distinguished from judicial deposits (which are placed into Public Account) and judicial stamp duties which are classified under indirect taxes.

5.6.2.4 Capital receipts

• recoveries of investment - refers to recoveries (either from charging or from sale proceeds) made from various capital works, including drainage and irrigation works. It also includes recoveries from investments in financial institutions.

• recoveries of loans and advances - where the Government provides loans to Provinces, local bodies or other institutions, the recovery of principal is recorded as a capital receipt. Where Government servants take out an advance, such as a house or motor vehicle advance, the recovery is also a capital receipt and

will be recognised when repayments are made by salary deduction.

• public debt - receipts arising from all forms of public debt, including internal and external borrowings, are placed into the Consolidated Fund under this head. The receipt is recognised when advised by those entities managing public debt.

5.6.3 Public Account

5.6.3.1 Savings schemes

• savings bank deposits - these are deposits made into various savings accounts operated by the Government such as Savings Bank accounts, National deposit accounts and Khaas Deposit Accounts. These accounts are normally maintained with Post Offices and National Savings Centres.

• federal savings and deposit certificates - these are deposits made for savings and deposit certificates (bonds) issued and guaranteed by the Government. Includes Defence Savings Certificates, Premium Savings Certificates and National Deposit Certificates.

5.6.3.2 Departmental and judicial deposits

• revenue deposits - these are deposits made in Revenue Courts or in relation to revenue administration, such as customs deposits, guarantees, earnest deposits and security deposits.

• civil and criminal court deposits - these are deposits received by the courts, including the High Court and Small Cause Courts, pending settlement. which will be either refunded to the payer or transferred to the Consolidated Fund, depending on the outcome.

These amounts, when received are to be deposited at the bank.

• personal deposits - personal deposits are funds dedicated to a particular purpose, for which a separate account is kept by the Treasury Office. Contributions into these funds are made by payment from the Consolidated Fund or payme nts by other bodies.

These include famine relief, flood relief, emergency relief etc.

• deposits of self-accounting entities - each self-accounting entity normally maintains separate accounts for deposits received under their own rules and regulations.

• deposits of local fund - these are deposits made to local bodies under the general control of Government or with regard to specific matters only. Monies shall not be placed into these funds without approval by a delegated authority in the Government. The balances

of each local fund are to be verified by the Accountant General at the end of each financial year.