Uncertainty looms over K-P’s budget

In principle, the caretaker govt was expected to announce budget in late February

PESHAWAR:

As the second four-month budget from November 2023 to February 2024, presented by the caretaker government of Khyber Pakhtunkhwa, approaches its term completion on February 29, the question of who will present the budget for the final four months (March to June) of the current financial year 2023-24 hangs in the balance.

Sources said that no concrete decision has been reached on this matter thus far. The caretaker government, in its current term, revealed a budget of Rs529 billion for the period of November 2023 to February 2024, reflecting a deficit of Rs79 billion.

The budget showcased an estimated income of Rs450.004 billion against an expenditure of Rs529.118 billion.

Allocations within the budget included Rs112.118 billion for development projects and Rs71 billion for the merged districts of the province. For the initial three months (July-September), the caretaker government had presented a budget of Rs462.930 billion.

Comparatively, this year's budget expanded to Rs992.055 billion, surpassing the previous fiscal year's eight-month budget of Rs888.00 billion. The breakdown reveals a budget of Rs350 billion for the first four months, followed by a second-quarter budget of Rs417.00 billion, culminating in a total development budget of Rs225.015 billion for eight months.

The second quarterly budget indicated a province income of Rs450 billion, while the earnings from July to October stood at Rs442.50 billion.

The caretaker government's financial approach maintained the tax and rate adjustments implemented during the PTI's Mahmood Khan government for the fiscal year 2022-23, reflecting consistency in its first and second four-month budgets.

Notable changes included the removal of property tax exemption for houses up to 5 marlas, with tax now applicable to 3 marla houses. In addition, the stamp value increased to Rs150 from Rs100.

The tax structure on various tobacco products was also revised: Rs12 per kg for Virginia tobacco, Rs6 per kg for white snuff, and Rs5 per kg for snuff tobacco.

While buildings owned by federal and provincial governments remained exempt from property tax, taxes on government buildings leased out for profit were retained based on annual rent. Moreover, religious places of worship such as mosques, churches, and gurdwaras continued to enjoy exemption from property tax.

However, as preparations for the budget for the next four months (March to June) are underway, uncertainties persist regarding which government—caretaker or newly elected—will present it.

Sources said that in principle, the caretaker government is expected to announce the quarterly budget in late February, while the newly elected government would be responsible for the fiscal year 2024-25 budget, aligning with its manifesto and policy.

However, a final decision on this matter is yet to be made. It is noteworthy that the finance department has already initiated the budgetary preparations for the next fiscal year 2024-25, guided by the instructions received from the elected government.

Published in The Express Tribune, February 13^th 2024.