LAHORE: The Punjab government improved its own tax collection by 8.9 per cent to Rs156.2 billion during the first eight months (July-February) of 2020-21 from Rs143.4bn a year ago, showed provincial civil accounts.

The total tax collection is 70.7pc of the province’s annual budget target of Rs220.9bn.

The most growth was shown by the Punjab Revenue Authority (PRA) in the collection of sales tax on services, which rose by a whopping 35.4pc to Rs93.2bn from Rs68.8bn in spite of the Covid-19 pandemic and significant concessions announced in the budget to support businesses to offset the adverse impacts of the pandemic. The eight-month PRA collection is over 77pc of its sales tax on service target of Rs121bn, according to the provincial civil accounts.

Total eight-month PRA collection stood at Rs96.6bn against its overall indirect tax target of Rs125bn. A press release by the PRA stated earlier this week that the agency had collected Rs10.6bn in March, taking its total to Rs107.2bn for the first nine months of this fiscal when compared with Rs79.6bn collected during the same period last year.

The Board of Revenue’s collection, on the other hand, fell by over 27pc to Rs36.8bn from Rs50.6bn last year against its target of Rs56bn for the entire year. The Excise and Taxation department was able to marginally increase its collection to Rs21.6bn from Rs20.8bn a year ago.

In spite of the increased provincial own tax revenues the pace of development spending appears to have slowed down as the province has spent Rs137.2bn out of its budgeted annual development programme of Rs337bn. Last year, Punjab had utilised Rs148bn from its development budget during the first eight months of the fiscal year. Officials are hopeful that the pace of development spending will pick up in the ongoing quarter when the unpaid bills become due for payment.

In the meanwhile, the provincial Resource Mobilisation Committee (RMC) has also started meetings to consider proposals from different departments for incorporation in the next budget for raising provincial own tax and non-tax revenues.

So far, according to the official sources, no significant proposal has come under discussion except increasing the rate of abiana. “So far we have not received any proposal from the PRA to expand the scope or rationalise the rates of sales tax on services in the next budget,” an official privy to the RMC discussions told Dawn. In answer to another question, he said the government was also not considering changes the existing rates of the agriculture income tax for different income slabs.

Published in Dawn, April 3rd, 2021