LAHORE: Punjab government has presented a budget of Rs 1,045 billion for fiscal year 2014-15, proposing ten new taxes on services, imported luxury vehicles, big houses and others in share of tax reforms.
Punjab government insists that the budget is balanced. However, Rs 11 billion difference between expenditures and revenue receipts was visible.
Opposition parties, especially PTI, strongly condemned the budget tearing small pieces of the budget, throwing them up in the air to float in the assembly before the assembly speaker.
“Everything was present in the speech of Finance Minister but justice was absent,” PTI MNA Mian Aslam Iqbal said.
The provincial government has set the tax collection target of Rs 164.7 billion for fiscal year 2014-15 which is 30 per cent higher than the current financial year ending June 30, 2014.
The government proposed a few reforms in the tax system besides making ten new services to be taxed under Punjab Sales Tax on services.
According to the finance bill, in order to rationalize the payments of stamp duty on transfer of right in immovable properties, it is proposed to be enhanced from 2 to 3 per cent while reducing registration fee from 1 per cent to Rs 500 or Rs 1000 only depending upon the value of the property, thus striking a good balance in property transfers. The enhancement will increase revenues from Rs 500-600 million.
Since the last revision, rental value of property has increased manifolds, the government intends to reduce the rate of tax from 20 to 5 per cent and also increase limit of annual value of exemption to a certain buildings and lands, the bill added.
The government has also intended to increase motor vehicle tax while amendments in Punjab Sales Tax on Services Act 2012 have also been proposed to further make smooth application of the said Act.
Under the Act the Punjab government has included 10 new services over which the Punjab Revenue Authority will collect tax.
The services included workshops, repairs and maintenance, indenting, brokerage, call centres, lab services, physical fitness centres, laundry and dry cleaning services, cable TV, TV and Radio programs production and print media advertisement.
Inclusion of these new services will also further bring equity in the Punjab sales tax base, harmonizing the tax system of the province, the bill said.
The government has also proposed tax on luxury imported vehicles and luxury houses to cover up cross subsidies. The government will spend the amount collected from luxury vehicles and houses to build low cost housing for poor.
Punjab Finance Minister Mian Mujtaba Shuja-ur-Rehman presented the provincial budget of Rs 1,044.95 billion, including annual development programme of Rs 345 billion for financial year 2014-15. The budget’s current expenditures are estimated at Rs 699.95 billion. The Annual Development Programme (Development budget) is Rs 345 billion with allocations for Social Sector Rs 96.3 billion; Communication and Infrastructure Rs 137.53 billion; Production Sector Rs 20.72 billion; Services Sector Rs 9.49 billion; Miscellaneous Rs 8.20 billion; Special Programmes Rs 18.1 billion and a sum of Rs 55 billion for other developmental priorities and special programmes.
Under the General Revenue Receipts, the Punjab government would receive Rs 804.19 billion from the divisible pool of the federal government, while the provincial tax and non-tax revenues estimated at Rs 228.87 billion in the next fiscal year.
