Khyber Pakhtunkhwa unveils Rs 249.15 billion budget

The provincial government of Khyber Pakhtunkhwa on Saturday presented a balanced budget of Rs 249.15 billion for the financial year 2011-12. The 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's budget estimates amount sanctioned for State Trading, Food, Grain and Sugar was shown as part of the total outlay of the budget, which presented an unrealistic picture of the budget. This year a huge amount of Rs 87.706 billion has been earmarked separately. The mentioned amount is shown against the need of "seeking credit from commercial banks and other financial institutions."
The salient features of the budget included a receipt of Rs 149.988 billion from federal government under the head of federal taxes while Rs 18.202 billion would be provided under the head of war against terrorism. The provincial government will also receive Rs 13.806 billion as royalty on oil and gas through straight transfers, Rs 6 billion as net profit on hydropower generation, Rs 25 billion outstanding arrears under the head of net profit on electricity.
The province will generate an amount of Rs 7.349 billion from its own resources, Rs 10.3 billion from general sales tax on services. The hydropower stations established by KP government will generate Rs 2.115 billion while Rs,16.112 billion will come from foreign project assistance and another amount of Rs 727.4 million through different miscellaneous resources.
The expenditure of Rs 249.15 billion include a current expenditure of Rs 149 billion. The details of the expenditures are as follows: 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 of Rs 2.50 billion for food subsidy.
The provincial minister for finance in his budget speech said that the resources of the province were limited and increase in them was inevitable. Therefore, efforts have been made for increase in the ratio of tax on the large income earning class and to provide relief to middle and low income earning citizens. Giving details of revision in the tax ratios, he said that capital and value-added tax on buying and selling of the properties was being decreased from 4 per cent to 2 per cent to facilitate poor and to promote the documentation of the property business.
He said that maximum cut has been proposed in delayed registration fee of the small vehicles particularly auto-rickshaws and motor-cycles. Prevailing late registration fee (fine) on motor-cycle that was Rs 2000 and Rs 5000 has been brought down to Rs 200 and Rs 500 respectively. Similarly, maximum relief is being proposed on the tractors and small cars.
Referring to tax on urban immovable property, the minister said it was decided to place least income earning areas of Peshawar in category C and no increase was proposed on them. Similarly, no increase has been proposed on least income earning areas outside of the approved townships. 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 generating 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, an increase has been proposed in this tax, which would be spent on the areas from where it was collected.
Increase was also proposed in fees of electric inspector and this would be levied only on 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.
For increase in the revenue of forests a raise in different taxes has been proposed while the department of communication and works (C&W) will levy fee in proportion to the new categorisation made by Engineering Council and increase is also proposed in different fees and taxes of the department of transport.
The provincial government has also proposed bringing the fee of the civil cases at par with other provinces. However, no increase has been proposed in Agriculture Income Tax and Land Tax as the fixed targets could not be achieved due to faulty recovery system. The provincial government will introduce reforms to make the recovery system more effective and will bring simplicity in it to achieve the expected income and remove deficiencies and weaknesses of the system.