LAHORE, June 15: The Punjab’s decision to allow 15 per cent raise in the pays and pensions of its 750,000 employees from July 1 in line with the federal government’s announcement is likely to result in an additional impact of Rs5.5 billion on the provincial exchequer.

Finance Secretary Salman Siddique, who accompanied Minister Hasnain Bahadur Dreshak at the post-budget press conference on Sunday, told newsmen that his department had so far not received the details of the decision from Islamabad to do point-to-point calculations.

“This impact will, however, be met through financial resources to be generated from extra-budgetary steps,” he said.

The minister said the government had asked the finance department to scrutinize the province’s entire tax system and rationalize the existing levies.

He said the chief minister wanted to have a proactive tax policy which did not burden the common man.

The government’s decision to revise upwards motor vehicle tax and professional tax on importers and exporters through the Finance Bill 2003 would yield additional resources of Rs105 million.

The government has pitched its tax receipts for the next fiscal at Rs15.773 billion, up by Rs1.974 billion from the current year’s budgetary estimates of Rs13.799 billion and by Rs1.688 billion from the revised estimates of Rs14.085 billion.

The finance bill seeks to slightly enhance the rate of token tax on various motor vehicles and rationalize the tax structure with a view to prescribe higher rate of tax for cars, taxis with higher engine power and lower rate for such vehicles having lower engine power.

It also proposes to enhance and rationalize transfer fee for motorcycles and scooters and cars with engine capacity up to 1000cc. Moreover, the bill proposes to broaden the tax base of professional tax on importers and exporter by levying Rs2,000 on imports and exports between Rs100,000 and Rs1 million, Rs3,000 on imports and exports exceeding Rs1 million but not exceeding Rs5 million, and Rs5,000 on imports and exports exceeding Rs5 million.

The finance bill has reduced the entertainment duty on horse racing to Rs1,000 from Rs4,000 of the payment for admission to rationalize duty structure and promote horse-breeding being one of the most profitable area of livestock.

The rate of stamp duty on the Memorandum and Articles of Association of a company has been reduced from Rs4,000 to Rs1,000 for each document to bring the rate at par with the rate prescribed by the Sindh government and to encourage establishment of the companies.

The government has also granted exemption from payment of electricity duty to the local governments.

The government also intends to reduce stamp duty and registration fee on housing finance to be obtained from banks to 0.5 per cent from the current two per cent to encourage and boost the housing sector.

It will also change the registration and renewal fee for arms dealership and arms licences. The change in the arms licence issuance and renewal fee would yield Rs2.376 million. The increase in the renewal of the arms dealerships to Rs15,000 from Rs10,000 would result in an additional resource of Rs13 million. The fee for getting new dealership licenses has also been increased to Rs3,000 from Rs2,000. But it is not likely to generate any resources due to ban on new dealerships.

Planning and Development chairman Humanyun Farshori said the government was improving the utilization of development funds. He said the budget for 2004-05 would contain only those schemes which would have been approved by April 30.

For the ensuing year, he said, Sept 30 had been set as the cut-off date for the approving the schemes. The schemes not approved by then would be dropped and money for them transferred to other projects.

Further, he said, the projects for which land was not acquired before Nov 30 would be deleted from the development programme. He said the officials responsible for delay in the completion of the schemes would be proceeded against.