Restaurants, Wedding Halls To Pay Fixed Sale Tax On Services: Advisor Finance KP

PESHAWAR, (UrduPoint / Pakistan Point News - 28th Mar, 2024) All restaurants and wedding halls in Khyber Pakhtunkhwa (KP) will be registered under the tax net, and they will be charged a fixed sales tax for the services they offer.

This was stated by the Advisor to KP Chief Minister on Finance Muzzammil Aslam at a consultative session on subordinate legislation under the KP Sales Tax Act 2022 arranged by Khyber Pakhtunkhwa Revenue Authority (KPRA) here on Thursday.

He was the chief guest in the session which was funded by the Sub National Governance Program and was attended by lawyers, tax experts, government officials, withholding agents, businessmen, and representatives of the chambers of commerce.

The advisor to CM said that the 23 percent property tax, charged in the province is very high due to which people have opted for stamp papers and only 6 percent of the property tax collected in the province is paid to the province and the rest goes to the Federal government.

To encourage women entrepreneurs, the advisor directed the Director General Khyber Pakhtunkhwa Revenue Authority (KPRA) to establish a women's desk in KPRA for their facilitation. He added that 93% of the province budget is dependent on federal transfers which is overly reliant on the federal government and the fiscal space with the provincial government is shrinking.

He stressed on increasing the province's tax revenue and said that 45 million of pollution is giving only Rs42 sales tax on services. He said he believes in reducing tax rates and increasing the tax base.

In her opening remarks the Director General of Khyber Pakhtunkhwa Revenue Authority Fouzia Iqbal thanked the participants of the session, the representatives of SNG, and the Chief Guest for their participation. She shed light on the need for the subordinate legislation and its importance.

"After the enactment of KP Sales Tax Act 2022, we desperately needed to draft and formulate rules and regulations under the Act for smooth and efficient imposition and functioning of Act," she said adding that the subordinate legislation will bring accountability in the working of the enforcement officers and will shelter the taxpayers from harassment at the hands of the enforcement officers.

"We needed the rules and regulations for the effective administration of sales tax in the province and to smoothly plead our cases in the courts," she said, adding that the gathering aimed to incorporate the suggestions of all stakeholders to make the legislation effective and beneficial for both KPRA and the stakeholders.

"Your commitment to engaging in constructive dialogue underscores the collective determination to foster a business-friendly environment that is both fair and conducive to growth", Muzzammil Aslam said adding that Subordinate legislation, often referred to as delegated legislation, forms the operational framework that breathes life into the broader principles outlined in Primary legislation.

He said they recognize that revenue from taxation is the lifeblood of nations, underpinning their ability to serve their people and foster prosperity. "We want to see KP financially self-reliant and the journey toward self-sufficiency demands a long-term strategy, and effective legislation", he added.

The subordinate legislation under discussion serves as the operational backbone of the Sales Tax on services Act, 2022, translating its principles into actionable guidelines for taxpayers and tax authorities alike, he maintained.

Speaking about KPRA, he said KPRA is lauded as the premier revenue-collecting agency of the province, significantly contributing to its financial independence since its establishment in 2013. “Through diligent revenue collection efforts, KPRA empowers the government to fund crucial infrastructure projects and social services,” he said citing the examples of developmental projects aimed at improving the lives of its citizens.

The Sehat Insaf Card has been resumed by government as our commitment to provide free healthcare to everyone in the province, he informed.

He said that the Peshawar Bus Rapid Transit (BRT), revolutionizing urban transportation, stands as a shining example of progressive governance. These initiatives, among others, are essential pillars of societal progress and prosperity, he added.

“However, the successful implementation of these projects necessitates adequate funding, which requires collective efforts from both the government and the people,” he said. Detailed presentations were given by advisor KPRA on tax Enforcement Fazal Amin Shah and experts from SNG who were behind the drafted rules and regulations.

Questions from the participants were taken and answered while their suggestions were noted for incorporation into the legislation.