LAHORE: The Punjab Revenue Authority (PRA) collected Rs73.7 billion from July to December 2020 registering a phenomenal growth of 41.6 percent over the Rs.52.1 billion collected in the first half of the previous financial year.
This performance is all the more remarkable in view of the unprecedented tax relief package given by the Punjab Government through the Finance Act, 2020 wherein the rate of Punjab Sales Tax on Services on more than 25 services was reduced to support COVID-affected sectors, boost compliance and encourage documentation.
The Government of the Punjab reduced the rate of PSTS from 16% to 5% for various sectors that were affected by the outbreak of the COVID-19 pandemic, including marriage halls and lawns, small hotels, caterers, tour operators, rent-a-car services, photographers, gyms and manpower recruitment services. In addition, the rate of PSTS on health insurance, medical consultancy and hospital charges was reduced to 0% to cut the cost of healthcare for the public.
The Government also reduced the rate of sales tax on restaurant and beauty parlor services from 16% to 5% in case of payment through credit / debit cards. This widely appreciated move was aimed at promoting documentation of the economy and has started to pay dividends as the proportion of customers using cards for payment is on the rise.
The Government also gave major tax relief to sectors considered crucial for economic growth. Rate of sales tax was reduced on property builders and developers from 16% ad valorem to Rs.100/sq. yard and Rs.50/ sq. ft. for land developers and builders respectively. The rate was also reduced to 5% for information technology services to encourage e-commerce and to 4% for ride hailing services.
