Peshawar: The Khyber Pakhtunkhwa (KP) government has proposed significant reforms and relief measures in property tax as part of its Rs 1754 billion budget for the fiscal year 2024-25, as reported on June 4 .
According to the details, the per canal tax on factories has been reduced from PKR 13,600 to PKR 10,000. For commercial properties, the tax rate has been lowered from 16 percent to 10 percent of the monthly rent. Additionally, private hospitals, medical stores, and other health sector businesses will now benefit from a reduced tax rate of 5 percent. Finance Minister of KP Aftab Alam presented the budget on Friday, highlighting a surplus of Rs 100 billion. The government has projected expenses of PKR 1,654 billion, with the budget focusing on social protection, peace, employment opportunities, and economic development, as per Chief Minister Ali Ameen Gandapur’s instructions.
The government has proposed a 10 percent increase in both salaries and pensions of government employees and an increase in the minimum wage from PKR 32,000 to PKR 36,000. The KP government anticipates receiving a total of PKR 1754 billion from various sources, including PKR 1212.036 billion from the federal government under Federal Tax Assignment, one percent of the divisible pool on war on terror, Straight Transfer under the head of royalties and surcharge on oil and gas, windfall levy, and net hydel profit. KP has improved its income over the past few years and has set a revenue target of PKR 93.5 billion for 2024-25 through a mobilization plan. The government aims to expand the tax net rather than increase taxes, implementing reforms in sales tax, property tax, tobacco tax, cess, and other taxes.
Sales tax on various online services has been decreased, with the tax on hotels reduced from eight percent to six percent, mandating the use of the Restaurant Invoice Management System. A fixed sales tax rate has been proposed for wedding halls. Additionally, the government plans to increase the tobacco development cess and reduce the provincial tax on property transfers from 6.5 percent to 3.5 percent.
