Punjab targets new services to raise revenues

Ten more services added to provincial taxation network

LAHORE: The Punjab government, in the first full-fledged budget under the Pakistan Tehreek-e-Insaf administration, has focused on increasing provincial revenues by imposing taxes on more services.

Ten new services have been proposed to be added to the provincial taxation network, most of which were never considered by previous governments.

For the next fiscal year, the Punjab government expects general revenue receipts of Rs1.99 trillion, which is 20% higher than the current fiscal year’s original estimate of Rs1.65 trillion and 36% more than the revised estimate of Rs1.47 trillion.

A major chunk of revenue, amounting to Rs1.6 trillion, is anticipated from the federal divisible pool. However, the province itself is expected to generate Rs388.4 billion from provincial taxes, which is almost 7% higher than the current fiscal year’s original estimate.

As per the finance bill tabled in the Punjab Assembly on Friday, under the second schedule, it was proposed to slap a fixed tax of Rs10,000 on companies registered under the Companies Ordinance 1984 with paid-up capital up to Rs5 million.

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Similarly, a tax of Rs30,000, Rs70,000 and Rs100,000 will be imposed on companies with paid-up capital of Rs5-50 million, Rs50-100 million, Rs100 million and above respectively.

Persons other than companies, who owned factories under the Factories Act 1932, were proposed to be taxed at Rs1,500, Rs5,000 and Rs7,500 for workforce size of 10, 10-25 and 25 or more respectively.

Persons other than companies owning commercial establishments having 10 or more employees were recommended to be taxed Rs6,000 per annum.

Similarly, persons engaged in the import or export of goods valuing at Rs0.1-1 million were suggested to be taxed Rs2,000 per annum.

In addition to these, persons involved in the import or export of goods valuing at Rs1-5 million and Rs5 million and above were proposed to be taxed Rs3,000 and Rs5,000 per annum respectively.

Contractors, builders and property developers, who supplied goods, commodities and services in the preceding year amounting up to Rs1 million, Rs1-10 million, Rs10-50 million and over Rs50 million were recommended to be taxed annually at Rs1,000, Rs6,000, Rs10,000 and Rs20,000 respectively.

Eleven new professions proposed to be taxed include medical consultants or special dental surgeons, who would be charged Rs5,000 per annum.

Registered medical practitioners were proposed to be taxed Rs4,000 per annum and homeopaths, Hakeems and Ayurvedics would be charged Rs3,000 annually.

Management of audit firms are liable to be taxed Rs6,000 whereas tax consultants, architects, engineering, technical and scientific consultants within metropolitan limits would be taxed Rs6,000 per annum.

Tax rate for the above mentioned occupations operating outside metropolitan and municipal corporation limits would be Rs4,000 per year.

Lawyers were also proposed to be included in the tax net with a marginal fee of Rs1,000 per annum. Members of stock exchange were recommended to be taxed Rs10,000 per year.

On the other hand, money changers operating within metropolitan and municipal corporation limits were proposed to be taxed Rs6,000 per annum while those operating outside of the limits were suggested to be taxed Rs2,000 per year.

Published in The Express Tribune, June 15^th, 2019.

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