PESHAWAR: The Khyber Pakhtunkhwa Revenue Authority (KPRA) has failed to impress in revenue collection as compared with other provinces.
The KPRA collected around Rs10.27 billion sales tax on services in the outgoing fiscal year (FY2016-17) against Sindh’s Rs78 billion and Punjab’s Rs82 billion. The revenue collection is miniscule even if the size of the KP economy and its development level is accounted for. Before devolution, the FBR used to collect sales tax on services of behalf of the provinces. The FBR still collects service tax for Balochistan.
The KPRA was established in 2013 for sales tax collection, a task that was devolved to provinces after the 18th Amendment in 2010. Sindh was the first province to establish its own authority in July 2011, followed by Punjab in 2012.
In FY2011-12, KP received Rs8.9 billion after deduction of FBR’s service charges. The said collection was with a limited coverage of 10 categories of services which was extended to around 50 after devolution.
It is estimated in an official report that Punjab’s collections efficiency at four per cent higher than that of KP at two per cent. The rapid increase in collections in Punjab can be attributed to the sectors covered. The most significant increase in Punjab comes from services currently not covered in KP. These include: travel agents, construction services and contractual execution of work or furnishing supplies. Some progress is being made in the coverage of building contractors.
