PESHAWAR: Adviser to the Khyber Pakhtunkhwa chief minister on finance Muzzammil Aslam on Thursday said that the provincial government would charge a fixed amount of sales tax on the services offered by restaurants and wedding halls in the province instead of the current eight per cent.

“We will bring all restaurants and wedding halls into the tax net,” the aide to the CM told a meeting about the KP Sales Tax Act, 2022, here.

The event was organised by the Khyber Pakhtunkhwa Revenue Authority and funded by the Sub-National Governance Programme.

The participants included lawyers, tax experts, government officials, withholding agents, businessmen, and representatives of the chambers of commerce and industry, according to an official statement.

Mr Aslam said that 23 per cent tax charged on property in the province was very high, and therefore, people went for stamp papers to avoid it.

CM’s aide directs revenue authority to set up desk for women entrepreneurs

He said that only six per cent of the property tax collected in the province was paid to the province, and the rest went to the federal government.

The chief minister’s adviser directed the director-general of the KPRA to establish a special desk on the premises of the authority for the facilitation of women entrepreneurs.

He added that 93 per cent of the province’s budget depended on federal transfers, which amounted to an “overly” reliance on the federal government amid the shrinking fiscal space of the provincial government.

Mr Aslam called for an increase in the province’s own revenue and said that only 45 million of the residents paid sales tax on services.

He praised the KPRA as the province’s premier revenue-collection agency, saying that since its establishment in 2013, it has significantly contributed to the province’s financial independence.

“Through diligent revenue collection efforts, the KPRA empowers the government to fund crucial infrastructure projects and social services,” he said.

Earlier, director-general of the Khyber Pakhtunkhwa Revenue Authority, Fouzia Iqbal, told participants that after the enactment of the KP Sales Tax Act, 2022, the authority desperately needed to draft and formulate rules and regulations for the smooth and efficient implementation of the law.

“Subordinate legislation will bring accountability to the working of the enforcement officers and will shelter taxpayers from harassment at their hands,” she said.

The director general of the KPRA said that there was a need for rules and regulations to ensure the effective administration of sales tax in the province and to plead the cases in the courts of law.

She added that the meeting was called to incorporate the suggestions of all stakeholders and make legislation effective and beneficial for both the KPRA and other stakeholders.

Published in Dawn, March 29th, 2024