KPK next fiscal year budget

Khyber Pukhtunkhwa finance Minister Taimur Saleem Jhagra presented record size budget in the Provincial assembly with an estimate outlay of Rs.900 billion. The share of development and non-development expenditure for the settled districts stand at Rs.693 billion and an allocation of Rs.162 billion have been made for the tribal districts. The development outlay for the settled districts has been fixed at Rs. 319 billion and for tribal districts Rs. 83 billion. As the revenue generation base of the province is still limited to over Rs.50 billion, the resource gap shall be filled by receiving NFC share of Rs. 589 billion from the federal government, foreign economic assistance of Rs. 80 billion fluctuating and not-so-certain net hydel profits which has all along remained a contentious issue between the center and province.

The allocations for the Elementary and Secondary Education will go up over Rs.100 billion and an outlay of Rs. 55 billion shall be set aside for health department. Bulk of the jobs creation will be done in education alone as 21000 vacancies shall be created which accounts for 25 percent jobs opportunities of estimated100000 vacancies in the public sector. On development side greater emphasis shall be on opening 700 hundred new school and significant expansion in the existing ones. Rs.7 billion shall be spent on the improvement and expansion of health infrastructure in big hospitals. Budgetary allocation has made for extending the jurisdiction of Insaf Health card to the entire province; allocation for the free of cost provision of medicines has been increased from Rs. 500 million to 1 billion; the treatment coverage for the cancer patients shall be Rs.820 million; and Rs. 4.40 billion shall be spent on immunization programme to streamline and expand the preventive healthcare system. The substantial increase in the allocations for social sector development, improvement in service delivery and jobs creation measures make the next fiscal year budget welfare oriented. The budget proposals also envisage the creation of 600000 jobs in the private sector. It remains to be seen how this target can be achieved in the prevailing extremely unfavourable environment for generating economic activities in industry and trade.

Bringing service industry under the tax net is commendable. The renowned economist Dr.Hafeez Pasha, while addressing a seminar in Peshawar few months ago, had given workable proposals for generating tax revenue from services sector. A symbolic fixed amount of sales tax has been levied on CNG filling stations, vehicle service stations, mobile cell phone towers, builders, contractors, educational institutions and Rs. 100000 Medical and Law Colleges. But it is pertinent to mention that the income of specialist doctors of different specialties from private practice is not properly documented for the levy of provincial taxes. Likewise, the specialist doctors who do practice in private hospitals do not issue receipts of consultancy fee to patients. And now in some private hospitals even diagnoses of diseases and prescriptions are given on plain paper instead of printed doctors’ pads. These are the tax evasion tactics which must be discouraged.

The 10 percent increase in the salaries of government employees from BS-1to BS-16 and 5 percent in salaries of government servants from Bs-17 to Bs-19 will be offset by fixing the minimum benchmark of income tax slab of Rs. 600000 per year. The previous government had enhanced it in the last year budget from Rs. 400000 to 1200000. The two digits inflation rate will further reduce the income of government employees in real terms. Reluctance shown to bring lawyers under the tax net merely because of their agitation power and legal clout is not justifiable. Junior lawyers charge Rs.50000 thousand fee from a client for legal aid in trial courts and Rs. 100000 and above in appellate courts. As told by the finance minister, the revenue generation target of Rs. 100 billion shall be achieved by the year 2023 therefore tax net will be further extended, leaving no holy cow outside the tax net.