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Khyber Pakhtunkhwa government is eyeing to increase its tax-receipts through imposition of Infrastructure Development Cess (IDC) and enhancement of existing ratio of various taxes in financial year 2015-16. The revenue starved Khyber Pakhtunkhwa is making exemplary measures to improve provincial revenue receipts in financial year 2015-16, by imposition of Infrastructure Development Cess and other tax-reforms in the province.
The tax-measures, including enforcement of IDC, would accumulate revenue of over Rs 54 billion in provincial receipts, the official sources, told Business Recorder here on Tuesday. Following the approval of Federal Board of Revenue (FBR), the provincial government has imposed Infrastructure Development Cess on trucks passing through the province, with ratio of one per cent as per their weight, while the task was given to Khyber Pakhtunkhwa Revenue Authority (KPRA) to collect the cess.
During outgoing financial period, the sources said a target of Rs 14billion was given against the Rs 12 billion to Khyber Pakhtunkhwa Revenue Authority to collect the amount through imposition of general sale-tax on services. He said the task of collection of IDC is also given to KPRA to generate revenue from this new tax. Senior Official of provincial finance department, the KP government is facing revenue shortfall of Rs 22 billion in the current budget's revenue receipts which ending on June-30. He added that it has received Rs 18 billion less from the centre account of its share in federal divisible pool along with Rs 4 billion deficits in its own receipts.
The official said the federal government had set the revenue collection target for the fiscal year 2014-15 at Rs 2810 billion but it had to revise the target to Rs 2605 billion due to several factors, including slump in international oil prices. The official informed that as the province received its share from the federal divisible pool at the rate of 9.01 per cent but because of the shortfall on federal level, it received Rs 18 billion short of the estimated amount for the current fiscal year, which would end on June 30. He said the federal government had transferred Rs 22 billion against Rs 29 billion to the province on account of oil and gas royalty so far during the current fiscal.
KP government had introduced the Infrastructure Development Cess (IDC), through its Finance Act in financial year 2014-15, but its implementation was faced delay due legal hiccup and permission from FBR. The measure meant to collect cess from the transporters, using the road infrastructure of the province, and set a target to collect Rs 2 billion by the provincial finance department during outgoing financial year.
The IDC would have proved a good impetus for the provincial economy. Efforts were remained fruitful to get permission from federal government to collect it in the province," the official said. He said the step was toward improving taxable-income and provincial revenue receipts. Similarly, the official said KP has set a target to collect revenue of over Rs 37 billion through increasing ratio of various taxes, which include tax and non-tax revenue in the financial period 2015-16, the sources.
Criticism: The business community of Khyber Pakhtunkhwa categorically rejected the imposition of Infrastructure Development Cess (IDC), what they said the step would negatively affect businesses in the province. Khyber Pakhtunkhwa Chamber of Commerce and Industry president, Faud Ishaq said the provincial government will collect Rs 8000/- per truck on name of IDC while passing through this region. He said the step was always resisted and opposed the community on several occasions, but the provincial government didn't accept their recommendations. He said step would create law and order situation in KP.
Members of business community say the federal government announced incentive package for revival of terrorism-hit businesses and industries in KP, while on the other hand provincial government intends to collect infrastructure development cess through chungi system, which couldn't be acceptable at any cost. They demanded to immediate withdraw the decision.
http://www.brecorder.com/business-and-economy/189:pakistan/1199193:kp-intends-to-increase-idc/
The tax-measures, including enforcement of IDC, would accumulate revenue of over Rs 54 billion in provincial receipts, the official sources, told Business Recorder here on Tuesday. Following the approval of Federal Board of Revenue (FBR), the provincial government has imposed Infrastructure Development Cess on trucks passing through the province, with ratio of one per cent as per their weight, while the task was given to Khyber Pakhtunkhwa Revenue Authority (KPRA) to collect the cess.
During outgoing financial period, the sources said a target of Rs 14billion was given against the Rs 12 billion to Khyber Pakhtunkhwa Revenue Authority to collect the amount through imposition of general sale-tax on services. He said the task of collection of IDC is also given to KPRA to generate revenue from this new tax. Senior Official of provincial finance department, the KP government is facing revenue shortfall of Rs 22 billion in the current budget's revenue receipts which ending on June-30. He added that it has received Rs 18 billion less from the centre account of its share in federal divisible pool along with Rs 4 billion deficits in its own receipts.
The official said the federal government had set the revenue collection target for the fiscal year 2014-15 at Rs 2810 billion but it had to revise the target to Rs 2605 billion due to several factors, including slump in international oil prices. The official informed that as the province received its share from the federal divisible pool at the rate of 9.01 per cent but because of the shortfall on federal level, it received Rs 18 billion short of the estimated amount for the current fiscal year, which would end on June 30. He said the federal government had transferred Rs 22 billion against Rs 29 billion to the province on account of oil and gas royalty so far during the current fiscal.
KP government had introduced the Infrastructure Development Cess (IDC), through its Finance Act in financial year 2014-15, but its implementation was faced delay due legal hiccup and permission from FBR. The measure meant to collect cess from the transporters, using the road infrastructure of the province, and set a target to collect Rs 2 billion by the provincial finance department during outgoing financial year.
The IDC would have proved a good impetus for the provincial economy. Efforts were remained fruitful to get permission from federal government to collect it in the province," the official said. He said the step was toward improving taxable-income and provincial revenue receipts. Similarly, the official said KP has set a target to collect revenue of over Rs 37 billion through increasing ratio of various taxes, which include tax and non-tax revenue in the financial period 2015-16, the sources.
Criticism: The business community of Khyber Pakhtunkhwa categorically rejected the imposition of Infrastructure Development Cess (IDC), what they said the step would negatively affect businesses in the province. Khyber Pakhtunkhwa Chamber of Commerce and Industry president, Faud Ishaq said the provincial government will collect Rs 8000/- per truck on name of IDC while passing through this region. He said the step was always resisted and opposed the community on several occasions, but the provincial government didn't accept their recommendations. He said step would create law and order situation in KP.
Members of business community say the federal government announced incentive package for revival of terrorism-hit businesses and industries in KP, while on the other hand provincial government intends to collect infrastructure development cess through chungi system, which couldn't be acceptable at any cost. They demanded to immediate withdraw the decision.
http://www.brecorder.com/business-and-economy/189:pakistan/1199193:kp-intends-to-increase-idc/
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