PESHAWAR: The Khyber Pakhtunkhwa government has set an ambitious Rs75 billion revenue target for the upcoming financial year.
The 2021-22 budget documents unveiled on Friday showed that the province’s own source revenue, which included all provincial taxes, fee and fines collected by the departments and were categorised into tax and non-tax components, had continued upward trajectory despite the pandemic-induced financial crisis and recession.
In financial year 2015-16, the then Pervez Khattak-led government had set the Rs54.52 billion tax target but ended up collecting Rs25.27 billion taxes in the year.
The document showed that the province tax collectors were hopeful about the collection of over Rs50 billion revenue collection during the outgoing fiscal.
It said the government made concerted efforts to augment and revive the overall revenue generation to enhance own receipts for 2020-21 and those efforts led to65 per cent more revenue collection in the current fiscal compared with 2018-19’s.
Taxes slashed for 27 sectors including construction, IT and e-commerce
The revenue target’s breakdown showed that the finance department was hopeful about the collection of Rs42.3 billion taxes, including Rs27 billion sales tax on services.
According to it, the tax receipts budgeted collection for 2021-22 are Rs43.2 billion, which is 54 per cent more than the outgoing year’s.
The target for non-tax receipts has been pitched at Rs31.8 billion.
The documents showed that the KP Revenue Authority contributed around 40 per cent of the total revenue collected in the province and outperformed all other tax collecting authorities during the last two years both within the province and across the country.
“For the first 11 months of the current fiscal year, the revenue collection has grown by more than 100 per cent compared to 2018-19’s during the same period. At current pace, the revenue collection is expected to cross the benchmark of Rs20 billion,” a document read.
According to the documents, the point-of-sales systems has been installed in more than 100 restaurants and hotels across the province also helped increase revenue as well as streamline taxation matters of an important revenue sector.
The KPRA in principle will offer reduced rates in the next year for the relief of the common man during the coronavirus pandemic dovetailed with extensive registration drive to augment compliance.
The documents showed a total of 27 sectors and sub-sectors would be taxed at lower than standard rates to support pro-poor segments, including continuation of the prime minister’s amnesty scheme for the construction sector, at the reduced rate of two per cent.
They said 10 sectors would be charged just one per cent sales tax on services, while the IT and e-commerce sector, which were in the infancy stage, would be charged at two per cent.
According to them, lower tax rates for hotels, restaurants and clubs will now be charged at a lower rate of eight per cent.
The agriculture sector will be given relief through reduced rates for cold storage and warehouses dedicated to the sector, while there will be a reduction of two per cent for authorised automobile dealers and launderers across AOP and individual registrations.
The documents said the print media had played a significant role in driving the pandemic- related information drive for public, so the rate for all print media advertisement had been reduced from five per cent to one per cent.
The construction sector will be given tax relief next year by extending exemption on CVT and reductions in registration fee, while land tax will be zero for the coming fiscal year to divert energies towards digitising land data and relieve farmers during the next year.
Published in Dawn, June 19th, 2021