PESHAWAR: The coalition government of ANP-PPP of Khyber Pakhtunkhwa Saturday presented a balanced budget of Rs.249.15 billion for the financial year 2011-12.Provincial Minister for Finance, Engineer Mohammad Hamayun Khan presented the budget in a specially convened session of the provincial assembly. Speaker, Khyber Pakhtunkhwa Assembly, Kiramatullah Khan presided over the proceedings of the House.In last year budget estimates, amounts sanctioned for State Trading, Food, Grain and Sugar were used to be shown as part of the total outlay of the budget, which was presenting unrealistic picture of the budget.
This year a huge amount of Rs.87.706 billion has been reflected separately. The mentioned amount is shown for seeking credit from commercial banks and other financial institutions, which is neither part of the income for expenditures of the province.
The salient features of the budget for finance next financial year included a receipt of Rs.149.988 billion from federal government in head of federal taxes while another amount of Rs.18.202 billion would be provided in head of operation against miscreants and terrorists.
The provincial government will also receive a receipt of Rs.13.806 billion in head of royalty on oil and gas through straight transfers, Rs.6 billion as net profit on hydropower generation, Rs.25 billion outstanding arrears in head of net profit on electricity.
The province will generate an amount of Rs.7.349 billion from its revenue resources, Rs.10.3 billion on general sales tax on services. The hydropower stations established with the own resources of the province will generate Rs.2.115 billion, Rs,16.112 billion from foreign project assistance and another amount of Rs.727.4 million through different miscellaneous resources.
The salient features of the expenditure of Rs.249.15 billion are including a current expenditure of Rs.149 billion. The details of the expenditures are including Rs.13.12 billion (Health), Rs.18.81 billion (Police), Rs.2.34 billion (Irrigation), Rs.1.23 billion (Technical Education), Rs.2.32 billion (Works & Services), Rs.16 billion (Pension & Insurance), Rs.50.82 billion ( Salaries & other expenses of district governments), Rs.10.60 billion for payment of mark-up on loans and amount of Rs.2.50 billion for food subsidy.
The provincial minister for finance said that the resources of the province are limited and increase in them is inevitable. Therefore, he said justified expansion and tax-net and rates had been proposed.
Efforts have been made for increase in the ratio of tax on the large income earning class to provide relief to middle and low income earning groups.
Giving details of revision in the tax ratios, he said that capital and value-added tax on buying and selling of the properties has been decreased from 4 per cent to 2 per cent to facilitate poor on one hand and promote the documentation of the property business on the other hand.
He said that maximum cut has been proposed in delayed registration fee of the small vehicles particularly auto-rickshaw and motor-cycle. Prevailing late registration fee (fine) on motor-cycle that was Rs.2000 and Rs.5000 has been cut down to Rs.200 and Rs.500 respectively.
Similarly, maximum relief is also proposed on the tractors and small cars. In head of urban immovable property (UIP) tax, the inclusion of least income earning areas of Peshawar has been proposed in the category C and no increase has proposed on them. Similarly, no increase has been proposed on least incoming earning outside areas of townships approved at divisional and district levels.
The high income earning areas of Peshawar would be included in the categories A and B on which reasonable increase has been proposed.
Furthermore, increase in UIP tax on properties inside divisional and district levels approved townships has also been proposed.
For financial year 2011-12 reasonable increase in the ratio of the valuable commercial properties on both sides of G.T. Road and Jamrud Road in Peshawar has been proposed while no increase has been proposed for commercial properties in other areas of the city.
Professional tax on large income earning private medical colleges, engineering colleges and business colleges has been levied while the ratio of the professional tax on big contractors is also being increased. Similarly, maximum increase has been made in the transfer and registration fees of the motor-vehicles.
Tobacco Development Cess, which was not increased since last one decade, but now in light of the growing price of the commodity in the market, increase has been proposed in this tax, which would be spent on the areas from where it collected.
Increase in different fees of electric inspector has also been proposed and it has been taken into consideration that this would be levied only contractors and commercial institutes to provide relief to common consumer. Water rate has also been increased to meet the growing expenses on the electricity and maintenance and repair.
Fore increase in the revenue of forests raise in different taxes has been proposed while the department of communication and works (C&W) will levy fee in proportion to the new categorization made by engineering council and increase is also proposed in different fees and taxes of the department of transport.
The provincial government in the budget for financial year 2011-12 has also proposed bringing the fee of the civil cases at par with other provinces of the country. However, no increase has been proposed
in Agriculture Income Tax and Land Tax as the achievement of the fixed targets could not be achieved due to faulty recovery system.
The provincial government will introduce different kind of reforms in making the recovery system more effective and bringing simplicity in it to achieve the expected income and remove deficiencies of the system.
