PESHAWAR: The government of Khyber Pakhtunkhwa has been making concentrated efforts over the last 4 years to grow Own Source Revenue (OSR) to Rs.100 billion annually generated by the province.
The efforts have been multi-pronged and focused improving ‘voluntary compliance’, during Covid-19, amalgamated with pro-poor rates and removal of duplicity in taxation heads, said White Paper on KP budget for financial year 2022-23.
The long-term vision of our government is to introduce and implement a holistic framework that encompasses tax harmonization within the province, which includes a single platform for filing and payment of taxes. This will not only enhance ease of doing business, but will also provide more systematic transparency and control to the provincial government.
The provincial government has also implemented digitization in key areas where a multitude of reforms have been introduced. The provincial government has also spearheaded initiatives like a live DSS portal with collection and filing updates coupled with digitization and alternate payment channels for Sales Tax on services and Excise & Taxation. The goal is to further expand these within other domains like the Board of Revenue and other taxation heads within Excise & Taxation Department. This will be key element leading the provincial government to the path of refined data monitoring, projections, forecasting and modeling for various policy decisions.
The KP government is also strengthening community to reach out to the masses and convey the predominant goal of tax collection and initiatives. The government has been dedicated to improving the general taxpayer perception and as result 3 consecutive taxpayer perception surveys regarding STS, the overall consistent growth, it need to grow with impressive numbers.
Despite the consistent growth, it needs to ensure that the message reaches out to the masses on a regular basis, in rural and urban areas, to ensure that they see the government as a taxpayer friendly legislator and collector.
One of the initiatives towards growing Own Source Revenues is the promotion of voluntary compliance to enhance revenue and the KP government wants to ensure that revenue increases without any coercion. Enforcement has to be amalgamated with taxpayer friendly initiatives like the availability of facilitation centres, complaint management units, accountability, check taxpayers is also heard and they feel valued.
Laffer Curve Analysis has also been part of the initiative so far, yet unwarranted elements like Covid-19 disrupted the overall analysis cycle. The government plans on analyzing this further in the coming years to come up with optimal rates where revenue and compliance both are at their highest peaks.
Other key initiatives in the top revenue generating departments are included increasing receipts from power generation by channeling wheeling agreements with industry while KP Revenue Authority is making efforts for tax harmonization with the federal government and following a single origination or destination principle.
Introducing optimal tax rate and buoyancy analysis for better prediction and forecasting and conducting tax potential estimation surveys, installing POS system in all 46 sectors from the 2nd schedule and incorporating 24/7 tax facilitation centres with service delivery centres throughout the province.
Similarly, the Board of Revenue is initiating E-stamping to eliminate fake stamp papers and exponentially enhancing revenue for the province, digitizing all mauzas across the province for instant availability of land record on BOR’s website and incorporating mutation fee, registration fee, and agriculture income tax on a single mobile payment application.
In line with initiatives to grow Own Source Revenues, Excise, Taxation and Narcotics Control Department had also taken various steps including incorporation of the payment of property tax, motor vehicle tax and payments in Zama KP application and revisiting Urban Immovable Property Tax rates as the market rates determined through third party analysis and market surveys.
The department is also carrying GIS mapping of all key urban areas for online record keeping and eliminating tax evasion in Urban Immovable Property Tax and also collaborating with other banks (apart from one-link) for instantaneous payments for all forms of levies, tax and cess under the provincial government.
Copyright Business Recorder, 2022