Trade Chronicle May - June 2020

TRADE CHRONICLE
Makhdoom Hashim presents
Rs2.2 trillion Punjab budget 2021
The total outlay
of the Punjab
budget 2020-21
i s a r o u n d
Rs2240 billion.
"The provincial
tax collection
r e c o r d e d a n
increase of 13
p e r c e n t ,
whereas, Rs144bn were distributed
amongst the needy under the Ehsaas
Program," said Bakht. He said that
collections' revenue worth Rs4,963bn
from Federal Divisional Pool is expected
while Punjab will be provided with
Rs1,433bn under NFC Award during the
next fiscal year. He said that a target of
Rs317bn has been fixed for Own-
Resources Revenue.
The minister said that special funds on a
priority basis have been allocated for
eleven important sectors including
education, health, and employment
generation.
The provincial government has proposed
to allocate Rs8.73 billion for the forest
department. Furthermore, Rs13.30 billion
has been allocated for the livestock
sector; meanwhile, Rs31.73bn has been
allocated for the agriculture sector.
Tax Relief
After the Coronavirus pandemic, the
Punjab government further strengthened
its business-friendly policies and
announced a tax relief package of over
Rs56 billion for the next financial year.
"This tax relief package is the largest tax
relief package in the history of Punjab,"
said the minister.
The tax rate on more than 20 services is
proposed to be decreased from 16
percent to 5pc including small hotels and
guest houses, wedding halls, lawns,
venues, tent services, and caterers, IT
services, tour operators, gyms, property
dealers, rent a car service.
The budget 2020-21, proposed to
reduce the sales tax on services including
health insurance and doctor's
consultancy fees and hospital fees, which
were 16pc and 5pc, respectively, to zero
percent. The government has proposed
to levy 16pc tax on restaurants and
beauty parlors customers on cash
payments and 5pc tax on credit or debit
card payments which will help document
the economy.
He said that Rs2bn has been allocated for
religious tourism and setting up new
tourist centers, whereas, the salary
budget has been frozen at Rs337.60bn.
The entertainment duty rate is proposed
to be reduced from 20pc to 5pc. All
cinemas are proposed to be exempted
from entertainment duty till June 30,
2021.
Taxation on real estate
The minister added that property tax for
the next financial year can be paid in two
installments. In case of full tax payment by
September 30, 2020, taxpayers will be
given a 10pc discount instead of 5pc and
a surcharge for the financial year 2020-
21. There will also be a full rebate on
receipt, he said.
Hashmi said that the revenue collection
from the Board of Government Land
Lease, Tenancy, Sale, etc. (Land
Utilization Policy) is expected to reach
Rs20bn. The minister informed that the
government has proposed to slash the
current rate of stamp duty from 5pc to
1pc in the next financial year. The
construction industry will flourish and new
jobs will be created, he added.
Business Facilitation
The minister told the assembly that in line
with the vision of the Prime Minister of
Pakistan, another historic step has been
taken to facilitate business by reducing
the business license fee to zero percent
from local government revenues.
Development Budget
A total of Rs337 billion is allocated for the
development budget for the next financial
year. Rs97.66 billion has been earmarked
for the social sector in the annual
development program; whereas,
Rs77.86 billion has been earmarked for
infrastructure development.
Projects under PPP
Under the Public-Private Partnership
Authority, megaprojects worth Rs165
billion have been identified for the next
financial year including, Lahore Ring Road
SL-4, Multan Vehari road diversion plan,
construction of Nala Lai Expressway, the
supply of water meters, and construction
of Rawalpindi Ring Road.
Education
Bakht said that more than Rs391bn is
allocated for the education sector. For the
financial year 2020-21, Rs350.1 billion
has been allocated for the School
Education Department. "This amount will
be used to provide scholarships to more
than 500,000 students and free
textbooks to all students," said the
minister. Whereas, Rs13.50 billion has
been earmarked for school councils.
Health Sector
Punjab Finance Minister said that an
amount of Rs284.2bn has been allocated
for the health sector for the next fiscal
year.
KPK budget
focuses on health, tax relief
The Khyber Pakhtunkhwa government
unveiled the Rs923 billion budget for the
financial year 2020-21 which focuses on
improvement in the health sector and tax
relief for businesses hit hard by the Covid-
19 pandemic.
KP Minister for Finance Taimur Saleem
Jhagra presented the budget in the
provincial assembly. He told media that
fundamentally the biggest challenge in
the wake of Covid-19 was to anchor fixed
costs of the government. He said that the
cost of unfunded pensions was huge;
Rs86bn allocation for pension in 2020-21
was one per cent back in 2005 that has
now risen to 15pc.
Budget documents estimate the
province’s overall expenditure at
Rs923bn, which includes Rs739bn for
settled districts and Rs184bn for merged
districts. Revenue estimates put the
federal transfers at Rs477.5bn, which
include the province’s share in the
divisible pool, straight transfers and 1pc
share from the divisible pool for war on
terror.
TRADE CHRONICLE - May.~ June. 2020 - Page # 09