LAHORE - The Punjab finance department has started preparations for budget 2015-16, inviting stakeholders to submit their proposals aimed at expanding the tax net.
According to finance department officials, Punjab Revenue Authority has also sent letters to different trade and service providing bodies to get their proposals for the upcoming provincial budget 2015-16 concerning the Punjab Sales Tax on Services Act and relevant regulation orders.
The officials said that the majority of concerned taxpayers, including chambers of commerce and industry, business councils, trade associations, tax bars, institutes of chartered accountants and cost and management accountants have submitted their written proposals.
They said the provincial government initiated the consultation process to avoid opposition in expanding the sales tax services to more sectors.
The finance department had sought suggestions from the stakeholders to enhance its revenue collection and to ensure availability of funds for its development expenditures.
During the last eight years, the province struggled to generate sufficient revenue to meet investment requirements in line with its development objectives.
In the wake of the 7th National Finance Commission (NFC) Award, the collection of sales tax on services at the provincial level has substantially increased the tax revenue of Punjab.
It is to be noted that the Punjab Revenue Authority collected Rs44 billion in fiscal year 2013-14 while Punjab Board of Revenue could collect Rs35 billion and Excise & Taxation Department could generate Rs17.8 billion.
Presently, the Excise & Taxation Department and Board of Revenue are generating revenue through various types of levies including vehicle tax, property taxes and agriculture tax, land transfer fee and stamp duties respectively but their outcome is very low. On the other hand, the PRA collects tax on services and contributes more than 46.5 per cent of total tax revenues of the province.
Officials in the Punjab Finance Department revealed that the government had decided merger of the Punjab Excise & Taxation Department and the Punjab Revenue Board into the PRA and shift their responsibility of revenue collection to the newly-constituted tax authority, as the performance of the old tax agencies’ has been dismal despite spending heavy budget on huge staff, offices and buildings of these departments.
Finance Department officials said that PRA taxpayers’ number has crossed the figure of 5,000 with average monthly collection of about Rs4 billion without any field staff including inspectors, superintendents or deputy superintendents.