K-P to charge fixed sales tax on services

Under new policy restaurants, marriage halls will pay fixed tax instead of 8 per cent

PESHAWAR:

The Khyber-Pakhtunkhwa government will charge a fixed amount of sales tax on services from restaurants and wedding halls across the province, while these establishments will be registered and brought into the tax net as part of a new policy.

This was stated by Advisor to the Chief Minister on Finance Muzzammil Aslam at a consultative session on subordinate legislation under the Khyber-Pakhtunkhwa Sales Tax Act 2022 arranged by Khyber-Pakhtunkhwa Revenue Authority (KPRA) at a Peshawar hotel.

He was the chief guest in the session which was funded by the Sub National Governance Program and was attended by lawyers, tax experts, government officials, withholding agents, businessmen, and representatives of the chambers of commerce.

The advisor, in his speech and during the question-answer session, said that the 23 per cent property tax charged in the province is very high which is why people have opted for stamp papers and only six percent of the property tax collected in the province is paid to the province and the rest goes to the federal government.

To bolster support for women entrepreneurs, the advisor instructed the Director General of KP Revenue Authority (KPRA) to establish a dedicated women’s desk, aimed at facilitating their ventures.

Expressing concern over the province’s heavy reliance on federal transfers, accounting for 93 percent of the budget, he emphasized the need to expand the provincial tax revenue. Highlighting the stark incongruity where a significant population burden translates into meager sales tax returns, he advocated for a strategy of lowering tax rates while broadening the tax base.

During her opening remarks, Director General Fouzia Iqbal expressed gratitude to the session participants, including representatives of the SNG, and the esteemed chief guest for their valuable time.

“After the enactment of Khyber-Pakhtunkhwa Sales Tax Act 2022, we desperately needed to draft and formulate rules and regulations under the Act for smooth and efficient imposition and functioning,” she said, adding that the subordinate legislation will bring accountability in the working of the enforcement officers and will shelter the taxpayers from harassment at the hands of enforcement officers.

“We needed the rules and regulations for the effective administration of sales tax in the province and to smoothly plead our cases in courts,” she said, adding that the gathering aimed at incorporating the suggestions of all stakeholders and to make the legislations effective and beneficial for both KPRA and the stakeholders.

Muzzammil Aslam thanked the participants for attending the session and giving their input in improving the rules and regulations.

Published in The Express Tribune, March 29^th, 2024.