Khyber Pakhtunkhwa’s Finance Minister has presented the province’s budget for the financial year 2020-21, which has a total outlay of Rs900 billion. provincial income taxes are being increased for the year 2020-21. According to the newly proposed regime, individuals with Rs20,000 to Rs30,000 monthly income will have to pay Rs1,000 per month.
The budget is expected to be reduced by Rs. 150 billion and the province will start the next financial year 2020-21 with a deficit of Rs. 35 billion. The PTI-led KP government has requested the federal government to allow the province to avail cash development loan facility to finance the province’s budget deficit. In the coming year, pension liabilities will be increased to Rs 84 billion.
Finance Minister Timur Saleem Jhagra said the figures were accurate due to revenue pressures and the global recession. The province is facing a deficit compared to the expenditure requirements in the next budget.
The High Court’s decision on retirement increases pension liabilities by at least 20% the current financial year. This year pension liabilities were Rs 70 billion
As far as public sector employees are concerned, the provincial government has proposed zero taxation for grade one to six employees of the provincial government. Rs1,000 in tax per month will be charged from the employees of grades seven to 12, Rs1,500 tax per month will be charged from provincial government employees of grade 13 to 17, Rs1,800 monthly tax for grade 18, Rs2,000 for 19, and Rs3,000 for grade 20 officers.
Annual tax on marriage halls will be Rs60,000; on restaurants and hotels, Rs40,000. Similarly, dentists will have to pay Rs15,000 per annum, general physicians Rs10,000, and specialists doctors in Peshawar Rs80,000 per year and in areas other than Peshawar, divisional and districts headquarters Rs50,000 per year.
The budget also proposes a tax of Rs30,000 on CNG and other gas stations. Similarly, Rs325 per acre will be charged against land measuring five to 12 acres. Those tailors who stitch shalwar kameez suits will have to pay Rs10,000 per year, while those who stitch trousers and shirts will have to pay Rs15,000 annually.
According to the new tax recommendations, Rs40,000 tax will be imposed annually on departmental stores, R10,000 on electronics shops, Rs2,000 on tobacco wholesalers, Rs1,500 to Rs3,000 on fitness clubs, Rs8,000 on service stations, and Rs100,000 on private medical and engineering colleges.
The provincial government announced to increase salaries of public sector employees of grade one to 16 by 10 percent and grade 17 to 19 by 5pc under an ad hoc relief allowance.
According to the Finance Bill 2020, all hotels and more than 18 professionals in the province have been exempted from every hotel tax and professional tax, but for this they have to register their business with Capra, tax on professionals and services belonging to all medical sectors While the entertainment tax has also been abolished. In order to increase the registration of vehicles in the province, re-registration will now be free of charge, while the requirement to get NOC from other provinces has also been abolished. Citizen immovable property
The tax location factor has been reduced and taxpayers who pay their taxes on time will get a further discount of up to 35%.According to the new finance bill, the sales tax rate on services in 27 different categories has been significantly reduced and the tax rate has been reduced from 8% to 5% for restaurants that will have point-of-sale software.Capital value tax and stamp duty have been abolished in view of the Prime Minister’s plan to support the construction sector, while all government primary, secondary schools and professional art colleges have been given full exemption on fees.