Punjab govt readies Rs2.2tr outlay
Revenue targets to be slashed amid pandemic
PHOTO: ONLINE
LAHORE:
Finance Minister Hashim Jawan Bakhat will present the provincial budget of over Rs2.2 trillion with an Annual Development Programme (ADP) of Rs335 billion for the fiscal year 2020-21 in Punjab Assembly on Monday (today).
To reduce the impact of coronavirus pandemic and give a boost to the provincial economy, the government has decided to reduce provincial sales tax (PST) on services besides giving exemption on various services. The expected PST rate has been decided at 5% for the majority of services for the upcoming financial year.
Information made available to The Express Tribune indicates that the province is expecting around Rs1.4 trillion from the federal divisible pool under the National Finance Commission (NFC) and Rs317 billion through provincial revenue streams, like the provincial sales tax on services, property tax, motor vehicles taxes, excise duty, professional tax and entertainment duty. The government also expects over Rs130 billion foreign assistance for donor-funded projects.
The documents show that the government has decided to slash most revenue collection targets as the coronavirus pandemic is not over yet and is expected to hit the economy further in the next fiscal year. The overall provincial tax revenue collection target has been fixed at around Rs230 billion, which is 22% lower than the current fiscal year.
The revenue collection target for the Punjab Revenue Authority (PRA) has been fixed at Rs125.4 billion, Board of Revenue Rs65 billion and Excise and Taxation Department Rs32 billion. Similarly, provincial non-tax revenue collection target has been estimated at Rs88 billion.
To set aside the dark clouds cast over the provincial economy, the government has decided to allocate around Rs30 billion for a stimulus package for small and medium enterprises (SMEs) besides a tax relief of around Rs15 billion.
The government is also going to give a tax incentive to about 10 sectors, including property developers and builders, commission agents of agricultural produce, tax and accounting consultants, photographers, skin and laser clinics, beauty parlours and salons, restaurants, manpower and recruitment bureaus, parking services, IT services and education franchise, if they voluntary submit provincial sales tax on services in case of payments through debit and credit cards.
In addition, the government has exempted provincial sales tax on services of medical consultancy, hospital bed and room charges, health insurance, hotel and guesthouses with less than 20 rooms, marriage halls, lawns, marquees and caterers, digital platform services, tour operators, healthcare, gyms and property dealers owing to the devastating impact of the coronavirus pandemic. Similarly, discounted PST rate of 5% has been proposed for car rental services (provided to individuals), automobile dealers other than corporate and authorised dealers, cable TV operators, toll manufacturing, treatment of textile, apartment management and rent collection.
For recruitment of over 8,500 medical professionals, the government has decided to allocate Rs10 billion, in addition to Rs35 billion for existing human resource of the Punjab Health Department under the Covid-19 initiatives and a block allocation of Rs13 billion for current expenditures related to coronavirus pandemic.
The data shows that four department share over 55% of the provincial budget, which include school education Rs323 billion, specialised healthcare Rs130 billion, primary healthcare Rs123 billion and police department Rs132.8 billion. The government has also decided to continue the Sehat Sahulat Card health insurance scheme for the poor with an estimated amount of Rs12 billion. A sum of over Rs38 billion is allocated for procurement of medicines, showing an increase of 57% from the current fiscal year’s Rs24.2 billion.
Also, an increase of around 135% is proposed in operating expenditures of the Punjab Health Department. A sum of Rs12 billion is allocated for Punjab Primary and Secondary Healthcare Department and over Rs37 billion for Specialised Healthcare and Medical Education.
Salary increase and new recruitments in different public departments will cost the provincial government an additional Rs36 billion. Increase in police department’s salary bill owing to new recruitments is estimated at Rs9.2 billion, new recruitments in health department will cost over Rs4 billion, coronavirus incentive allowance Rs9.5 billion, judges package Rs1.5 billion, doctors package Rs2 billion and annual increments Rs8 billion.
Published in The Express Tribune, June 15th, 2020.
Finance Minister Hashim Jawan Bakhat will present the provincial budget of over Rs2.2 trillion with an Annual Development Programme (ADP) of Rs335 billion for the fiscal year 2020-21 in Punjab Assembly on Monday (today).
To reduce the impact of coronavirus pandemic and give a boost to the provincial economy, the government has decided to reduce provincial sales tax (PST) on services besides giving exemption on various services. The expected PST rate has been decided at 5% for the majority of services for the upcoming financial year.
Information made available to The Express Tribune indicates that the province is expecting around Rs1.4 trillion from the federal divisible pool under the National Finance Commission (NFC) and Rs317 billion through provincial revenue streams, like the provincial sales tax on services, property tax, motor vehicles taxes, excise duty, professional tax and entertainment duty. The government also expects over Rs130 billion foreign assistance for donor-funded projects.
The documents show that the government has decided to slash most revenue collection targets as the coronavirus pandemic is not over yet and is expected to hit the economy further in the next fiscal year. The overall provincial tax revenue collection target has been fixed at around Rs230 billion, which is 22% lower than the current fiscal year.
The revenue collection target for the Punjab Revenue Authority (PRA) has been fixed at Rs125.4 billion, Board of Revenue Rs65 billion and Excise and Taxation Department Rs32 billion. Similarly, provincial non-tax revenue collection target has been estimated at Rs88 billion.
To set aside the dark clouds cast over the provincial economy, the government has decided to allocate around Rs30 billion for a stimulus package for small and medium enterprises (SMEs) besides a tax relief of around Rs15 billion.
The government is also going to give a tax incentive to about 10 sectors, including property developers and builders, commission agents of agricultural produce, tax and accounting consultants, photographers, skin and laser clinics, beauty parlours and salons, restaurants, manpower and recruitment bureaus, parking services, IT services and education franchise, if they voluntary submit provincial sales tax on services in case of payments through debit and credit cards.
In addition, the government has exempted provincial sales tax on services of medical consultancy, hospital bed and room charges, health insurance, hotel and guesthouses with less than 20 rooms, marriage halls, lawns, marquees and caterers, digital platform services, tour operators, healthcare, gyms and property dealers owing to the devastating impact of the coronavirus pandemic. Similarly, discounted PST rate of 5% has been proposed for car rental services (provided to individuals), automobile dealers other than corporate and authorised dealers, cable TV operators, toll manufacturing, treatment of textile, apartment management and rent collection.
For recruitment of over 8,500 medical professionals, the government has decided to allocate Rs10 billion, in addition to Rs35 billion for existing human resource of the Punjab Health Department under the Covid-19 initiatives and a block allocation of Rs13 billion for current expenditures related to coronavirus pandemic.
The data shows that four department share over 55% of the provincial budget, which include school education Rs323 billion, specialised healthcare Rs130 billion, primary healthcare Rs123 billion and police department Rs132.8 billion. The government has also decided to continue the Sehat Sahulat Card health insurance scheme for the poor with an estimated amount of Rs12 billion. A sum of over Rs38 billion is allocated for procurement of medicines, showing an increase of 57% from the current fiscal year’s Rs24.2 billion.
Also, an increase of around 135% is proposed in operating expenditures of the Punjab Health Department. A sum of Rs12 billion is allocated for Punjab Primary and Secondary Healthcare Department and over Rs37 billion for Specialised Healthcare and Medical Education.
Salary increase and new recruitments in different public departments will cost the provincial government an additional Rs36 billion. Increase in police department’s salary bill owing to new recruitments is estimated at Rs9.2 billion, new recruitments in health department will cost over Rs4 billion, coronavirus incentive allowance Rs9.5 billion, judges package Rs1.5 billion, doctors package Rs2 billion and annual increments Rs8 billion.
Published in The Express Tribune, June 15th, 2020.