LAHORE, June 14: Punjab’s tax free revenue budget of Rs274.088 billion, proposing a revenue expenditure of Rs191.378 billion and indicating a revenue surplus of Rs82.71 billion, and record development programme of Rs100 billion for the financial year 2006-07 was presented in the provincial assembly on Wednesday amid token walkout by the combined opposition in protest against what it termed as breach of sanctity of the budget by Chief Minister Pervaiz Elahi.
The opposition leaders, Qasim Zia and Rana Sanaullah Khan, said the chief minister had grossly violated the sanctity of the budget by disclosing its size and other details at his pre-budget press conference.
They dubbed the act of revealing the details of the budget before its presentation in the assembly as a sign of disrespect towards the elected representatives of the people.
Mr Elahi defended his act, saying he had not revealed the details of the changes in the provincial taxes proposed in the finance bill.
He said he had given only a policy statement and explained targets set by his government for the development of the province over a medium term in his pre-budget press briefing on Tuesday, which did not amount to breach of the sanctity or secrecy of the budget at all.
The opposition legislators, however, came back to the house after a few minutes during the budget speech by the finance minister.
The total proposed budgetary outlay for the next financial year is 22.13 per cent greater than that estimated for the current year’s Rs224.409bn. Similarly, the proposed revenue expenditure for 2006-07 is 21.48 per cent higher than the current year estimates for revenue expenditure of Rs157.528bn. The revenue expenditure also includes the bill of Rs10bn which the provincial government would have to incur on account of pay and pension increase announced in the federal budget.
The federal transfers of Rs201.408bn (Rs180.240bn from federal divisible pool of taxes, Rs6.466bn as straight transfers and Rs14.702bn as federal grants) will form 73.48 per cent of the total revenue receipts of the province. This compared with provincial own resources of Rs72.678bn, which form 26.52 per cent of the total provincial revenue receipts.
The tax revenue target for the next year has been raised to Rs30.343bn or by 17.7 per cent from the outgoing year’s estimate of Rs25.771bn. The target for the provincial non- tax revenue receipts has been set at Rs42.335bn, which is higher by 27.8 per cent from the outgoing year’s target of Rs33.124bn. The estimate for the provincial non-tax revenue also includes Rs7.648bn booked under the head of ‘extraordinary receipts’ on account of arrears of Ghazi Barotha hydel profits during the last three-and-a-half years.
Since Wapda (and the federal government) has yet to accept Punjab’s claim for royalty from the operations of the project, the amount booked on its account is likely to be received by the province as has been the case during the current fiscal year.
The loss in non-tax revenue on account of non-payment of royalty, the officials say, would be made up from other sources. We have parked monies, which have not been accounted for in the budget, in other places, claims a senior official.
FINANCE BILL, 2006: A finance bill, proposing reduction in court fee, rationalisation of stamp duties on financial instruments, and expansion in the scope of exemptions already given under the Punjab Sales Tax Ordinance 2000, was also moved. The decision to table the finance bill was taken by the government at the eleventh hour in view of legal requirements.
The finance bill proposes to reduce court fee rate from 8.5 per cent or maximum of Rs34,000 to 7.5 per cent or maximum of Rs15,000 by amending the Court Fees Act, 1870 (VII of 1870). The rate of court fee was increased in 1996, but the decision was struck down by the high court in 1997. Since the enhanced court fee rate was never implemented, the government has decided to revive the previous rate.
It also suggests to amend the Stamp Act, 1899 (II of 1899) for slashing stamp duties on the financial instruments like agreement relating to deposit of title deeds, pawn or pledge and debenture or participation term certificate or term finance certificate or any other instrument of redeemable capital other than a commercial paper.
In addition, the bill seeks to amend the Punjab Sales Tax Ordinance to expand the scope of exemption given on advertisements run by the Population Welfare Division on TV and radio. Earlier the exemption is granted only to the advertisements funded by grant from the USAID. The amendment in the ordinance will extend the scope of exemption to the advertisements funded from grants obtained from any source.
