LAHORE: The Punjab government has estimated the revenue collection of Rs220.89 billion during the financial year 2020-21 as compared to Rs294.96 billion budget estimates of the corresponding period.

The break-up of these estimates shows the provincial government has assigned the Punjab Revenue Authority (PRA) a revenue collection target of Rs 125 billion for the year 2020-21 with a decrease of 25 percent against the budget estimates of the current financial year.

During the year 2019-20, the revenue collection target for the Authority was Rs 166.550 billion. The target for the next financial year is based on the revenue trends collected during the current fiscal, said the budgetary documents.

The government has reduced the Punjab Sales Tax on Services (PSTS) for nine sectors from 16 to 5% to incentivize compliance. Furthermore, the government of Punjab has consented to a Memorandum of Agreement (MOA) with the federal government geared towards 'Harmonization of Sales Tax' across the country. This MOA has come in the wake of the creation of a National Tax Council under the FCC by the federal government, the documents said.

Highlighting the performance during the current year, the documents said due to overall impact of COVID-19 on the service sector and the reduction of PSTS on 20 plus sectors from 16% to 0% for the last quarter of FY19-20 under the tax relief package the revised estimates for FY19-20 has been set at PKR 105 billion. This amount also includes the transfer of PKR 4.288 billion claims pending with the federal government regarding the wrong transfer of PRA funds to FBR by NBP.

Services such as telecommunications, banking/ insurance, contractual execution, etc were expected to be the primary revenue spinners for PRA during the financial year and have also generated the highest revenue amongst different sectors as shown below. Similarly, revenue collection by the Board of Revenue (BOR) for 2020-21 has been set at Rs 56 billion which include the agricultural income tax, land revenue Rs 20 billion, stamp duty target of 33.426 billion.

Likewise, the revenue collection target under Motor Vehicle Taxes has been set at 13.031 billion and Rs 14.500 billion under the urban immovable property tax.