Punjab Revenues Up By 30pc: Dr Ayesha Ghaus Pasha

Punjab Finance Minister Dr Ayesha Ghaus Pasha on Friday disclosed that broadening of tax base without increasing tax rate by Punjab government had resulted in around 30 percent increase in the tax collection of the province during last four years.

LAHORE, (UrduPoint / Pakistan Point News - 30th Mar, 2018 ) :Punjab Finance Minister Dr Ayesha Ghaus Pasha on Friday disclosed that broadening of tax base without increasing tax rate by Punjab government had resulted in around 30 percent increase in the tax collection of the province during last four years.

Talking to members of Lahore Economic Journalists Association (LEJA) led by their President Nasir Jamal, here at Lahore Chamber of Commerce and Industry, the minister said that revenue growth of Punjab from its own resources was ten percent higher than the revenue growth at Federal and other three provinces.

She added that Punjab revenues were increased despite reducing the tax rate on 22 services, citing that Punjab Revenue Authority inherited only 12 services which were being taxed and the number had now increased up to 62 services.

Dr. Ayesha Ghaus Pasha said that Punjab government used modern technology to bring numerous tax evading sectors under tax net, and the taxes were collected without any harassment to the taxpayers.

She revealed that in year 2013 when Punjab Revenue Authority (PRA) was established, taxes collected from telecommunication sector were 78 percent of all the service tax collected in Punjab. Today, she cited, the services tax revenues had increased above Rs 80 billion compared with Rs 12-13 billion in 2013 but the share of telecom sector in revenue collection had declined to only 22 percent.

The broadening of the tax base, she said, could be judged by the fact that the number of tax registered persons in Punjab was only 23,500 in 2013 that had now increased to 48,000. She said provincial services taxes were expected to cross Rs 100 billion by the end of this fiscal and the government was also aiming to increase the number of service taxpayer to 100,000 by next fiscal.

Provincial Finance Minister said this transformation in tax revenue was achieved with the coordination of Punjab Tax Reforms Unity, the only of its kind in the provinces. As a result of gradual but prudent reforms, she mentioned, tax collection had increased not only in PRA but also in Excise Department and board of Revenue.

Giving some examples of reduced taxation, she said, rates of property tax had been reduced but its total collection had increased. Similarly, she added, the construction sector was charged 16 percent and the services tax on government construction was 5 percent and now the tax for both the sectors was 5 percent.

She said that the potential for tax collection was much higher in the province however, "We are deliberately moving with caution and targeting sector which can produce results with less efforts." The difficult sectors like doctors and other professional services would also be touched when the revenue authority was fully prepared with technology.

She said problem with taxing doctors was that it could increase the healthcare cost, but the government was working on different models to bring doctors under tax net without increasing burden on the patients.

She said Punjab had successfully complimented the amount it received under National Finance Award with high provincial revenue generation, and this had enabled the provincial government to more than triple the development budget from Rs 149 billion to Rs 680 billion.

She said huge development on power and infrastructure projects had transformed the Punjab economy that had been growing above the national average in recent years. She pointed out that huge amounts had been spent on health, education and clean water projects, besides laying an integrated network of roads in the rural areas.

Dr Ayesha Ghaus said that the next Punjab budget would be presented in the Provincial Assembly in the first week of May. She said the thrust from now onwards would be more on boosting agriculture and small and medium enterprises.

She said the provincial government had managed to reduce the cost of inputs for the farmers by asking the federal government to reduce duties on pesticides and fertilizer. Where it was found that there was further need for reduction, Punjab government was providing subsidies, she said and added that provincial government was also picking up GST on electric tube-wells to reduce cost of the farmers and more than 350,000 farmers had been provided concessional credit as the markup would be borne by the provincial government.

She said SMEs would get training package, access to finance on same pattern as provided to farmers, credit guarantee insurance, linkages with larger industries and academia, development of industrial clusters and establishing incubators in the university.

Regarding health and education, she warned that there would be more current expenditure as the projects that had been completed would have to be operated.