The Khyber Pakhtunkhwa government has included proposals to increase tax collections on the one hand and provide concessions to certain sectors on the other in the finance bill to be presented for the next fiscal year. According to government documents, the proposed measures have been prepared to increase provincial revenue and meet the needs of development expenditure.
According to the finance bill, residential property owners will be given a 30 percent concession on a lump-sum payment of arrears. The government aims to encourage citizens to pay on time. To benefit from this facility, payment will be required by June 30, 2026, while penalties will be imposed on those who have arrears after the specified period.
The proposed financial measures also include new taxes for the transport sector. It has been proposed to impose an annual tax of Rs 1,000 on motor rickshaws and three-wheelers. Similarly, it has been recommended to fix an annual tax according to the number of seats for different categories of commercial vehicles.
An attempt has also been made to bring the hotel sector under the ambit of the tax system in a more effective manner. It has been proposed to collect 5 percent tax from hotels using point-of-sale systems, while up to 10 percent tax under a specific formula from other hotels. Officials say that this move will help increase transparency in the tax system.
According to the budget documents, the provincial government plans to spend a total of more than Rs 2.17 trillion. This includes a large part of ongoing expenses, while more than Rs 524 billion has been proposed to be allocated for development programs.
The documents also state that Khyber Pakhtunkhwa is expected to receive more than Rs 1540 billion in federal tax revenues. In addition, there is a possibility of generating significant income from the war on terrorism, oil and gas surcharge and windfall levy.
According to economic experts, on the one hand, the proposed budget has tried to increase revenues, while on the other hand, the goal is to promote economic activities through development spending and tax incentives, the effects of which may be noticeable during the next fiscal year.
