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Home Politics KP Government Expands Tax Net, Ends Exemptions in Tribal Districts and Malakand Division

KP Government Expands Tax Net, Ends Exemptions in Tribal Districts and Malakand Division

To bolster provincial revenue, approval for the removal of exemptions, along with an expansion of the tax net, will be sought from the provincial cabinet.

by Muhammad Faheem - 13 Mar, 2024 1768
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The Khyber Pakhtunkhwa government has resolved to terminate tax exemptions for international aid organizations, local entities, and health cards, extending the tax net to include tribal districts and the Malakand division.

To bolster provincial revenue, approval for the removal of exemptions, along with an expansion of the tax net, will be sought from the provincial cabinet. While the Khyber Pakhtunkhwa Revenue Authority had previously granted tax exemptions to tribal districts and Malakand Division until October 31, 2023, the government had not taken stringent measures to broaden the tax net.

A special campaign by the revenue authority had registered numerous businesses to augment the tax net in the Malakand division, prompting the decision to encompass the tribal areas and Malakand division in the tax net.

Also Read: Revival of Health Card Program in Khyber Pakhtunkhwa Brings Relief to Patients

Finance Advisor Muzamil Aslam has requested a comprehensive report on tax exemptions across the province to enhance provincial revenue. This report encompasses details from all departments, outlining the tax levied and exemptions available to various sectors. Approval for tax exemptions will be sought from the provincial cabinet for all departments across the province, including local institutions and foreign aid organizations.

Currently, approximately half of the provincial government's revenue is derived from taxes, with the remainder coming from contracts and other fees. The government aims to increase revenue by broadening its resource base, considering options like terminating tax exemptions for certain sectors.

Decision to Initiate Reward Scheme for Tax Inclusion

The Khyber Pakhtunkhwa government has additionally decided to launch a reward scheme to incentivize citizens to enter the tax net. Pre-budget consultations with stakeholders will precede decisions regarding tax increases or new taxes.

Director General of the Khyber Pakhtunkhwa Revenue Authority, Fauzia Iqbal, provided a comprehensive briefing on revenue and tax rates to Chief Minister's Advisor on Finance Muzamil Aslam. The finance advisor emphasized formulating tax policies for the upcoming fiscal year after consulting with all stakeholders.

A pre-budget consultation meeting will include stakeholders like hotel owners, the Chamber of Commerce, the Car Bargain Association, the Restaurant Owners Association, and other trade organizations. The Khyber Pakhtunkhwa Revenue Authority plans to conduct a reward scheme in the restaurant and hotel sectors to register businesses and encourage entrepreneurs across the province, including the merged districts.

The finance advisor also instructed the withdrawal of exemptions granted to various sectors, with the Director General issuing orders to the PRA to complete the necessary documentation for approval from the Cabinet.

Provincial Revenue Collection at 26 Billion 86 Crores

During the initial eight months of the financial year, the Khyber Pakhtunkhwa Revenue Authority successfully collected 26 billion 86 crores, aiming to achieve a target of 42 billion rupees set by the Khyber Pakhtunkhwa government.

Despite economic challenges and a downturn in business, the authority's employees and staff have demonstrated commendable success with a strategic approach. With concerted efforts, they anticipate achieving the targeted 42 billion rupees by the end of June.

The authority faces the challenge of collecting an additional 15 billion 20 crores in the remaining four months to meet its annual target.