PESHAWAR - The Khyber Pakhtunkhwa government yesterday unveiled Rs900 billion surplus budget proposing various new taxes for the year 2019-20, besides allocating Rs319 billion for Annual Development Programme (ADP).

Amid opposition’s uproar mainly by PPP and PML-N, KP Finance Minister Taimur Khan Jhagra, presenting budget in the assembly, said Rs693 had been allocated for old districts and Rs162 billion for merged districts of the province showing Rs45 billion surplus.

Apart from Rs319 billion allocated for ADP, Rs236 billion and Rs83 billion would be spent on development programmes for settled districts and merged tribal districts, respectively.

Staging protest in front of speaker’s dais, opposition lawmakers called upon government to issue production orders of former president Asif Ali Zardari and Hamza Shehbaz. Holding banners of Asif Zardari, PML-N Quaid Nawaz Sharif and others, they raised slogans before boycotting the budget speech.

However, their protest and sloganeering did not bother Taimur Jhagra, who without a break continued his speech and announced 10 percent adhoc relief allowance for employees from BPS-01 to 16 and five percent for officers from BPS-17 to 19. In the same breath, he said, that due to tough economic condition the government was in no position to increase salaries of employees from BPS-20 to BPS 21.

He also announced 12 percent reduction in salaries of cabinet members. He said salaries of civil servants posted against positions with additional allowance will not be increased. Taimur said government saved Rs95 billion through austerity measures during outgoing fiscal year making it possible to enhance development programme of the province.

About revenue targets, Taimur, presenting a breakup, said that revenue generation for the fiscal year 2019-20 would be Rs900 billion including Rs453.2 billion from federal tax assignments, Rs54.5 billion (one percent) from divisible pool under the



 head of war on terror, Rs25.6 billion from oil and gas royalty and surcharges, Rs21.2billion from net profit of power generation, Rs34.5 billion from NHP, Rs53.4 billion from provincial taxes and non-taxes, Rs82 billion from foreign projects assistance, Rs24.7 billion from other sources and Rs151 billion grant for tribal districts.

Similarly, he said the government would take revenue target for KPRA to 100 billion by 2023 that would be three times higher than the current revenue of the province, adding that the revenue generation would be tax-based.

According to budget speech, individuals with Rs10,000-20,000 monthly income will pay Rs330 per month as income tax. People with income of Rs20,000 to Rs50,000 will have to pay Rs350 per month. A tax of Rs600 per month has been proposed for those individuals earning between Rs50,000 to Rs100,000 per month.

The individuals falling in the next slab of Rs100,000 to Rs200,000 monthly income will have to pay Rs800 monthly. Similarly, Rs1,000 per month tax has been proposed for those earning Rs200,000 to half a million rupees.

The budgetary documents revealed that as far as public sector employees are concerned, the provincial government has proposed zero taxation for grade one to four employees of the provincial government. Rs100 in tax per month will be charged from the employees of grade 05 to 12, Rs200 tax per month will be charged from provincial government employees of grade 13 to 16, Rs300 monthly tax for grade 17, Rs500 per month for grade 18, Rs1,000 for 19, and Rs2,000 for grade 20 officers.

The provincial government has also proposed Rs 15,000 sales tax on hotels and restaurants and marriage halls, doctors Rs10,000, specialist doctors Rs20,000, Rs15,000 sales tax on CNG and filling stations per year. Likewise, tailors will have to pay Rs5,000 tax annually, a tax of Rs350 would be collected from land owners having 5 to 12 acres land. A tax of Rs1000 has been proposed on big stores, electronic shops and cable operators, bodybuilding clubs will pay Rs2000, service station Rs8,000 per year. Besides, it has also proposed collecting Rs100,000 from private engineering and medical colleges. The government has proposed 50 paisa cess-tax on one Kg Naswar.

Six administrative departments will be responsible for tax collection. Excise Taxation and Narcotics Control will collect Urban Immovable Property Tax, Motor Vehicle Excise, Infrastructure Development Cess and Tobacco Development Cess. KP Revenue Authority (KPRA) will be responsible for collecting sales tax on 91 services, while Revenue and Estate Board will collect tax on mutation, agricultural income, stamp duties, registration fees, land revenue and urban capital value tax. Similarly Energy and Power Department will be responsible for collecting tax on hydel power projects and electricity duty. Transport and Mass Transit Department will be responsible for collecting tax from adda licence fee, transport fares, goods and forwarding agencies, route permits fee, motor vehicle fitness and examiners.

Likewise, Information and Public Relations Department will collect tax on print and electronic media, printing press of DGPR, advertisements on Pakhtunkha FM Radio, registration and renewal of newspapers and advertising agencies.

About expenditures, the finance minister said that Rs.256billion will be spent in old districts, Rs69.9 billion on salaries, Rs.93.5billion on non salary head, Rs.37.6 billion on other running expenditures, Rs46 billion on provincial ADP and Rs82 billion foreign aid assistance. For the merged areas, he said Rs79 billion have been allocated for running expenditures and Rs83billion for development outlay in the tribal districts. Therefore, the total surplus amount comes to Rs45billion as against total expenditure of Rs855billion.

Allocating Rs46 billons for local bodies which is 30 percent of the ADP, he said that special development budget for Peshawar City includes provision of Rs.2 billion for starting second shift of Water Sanitation Services Peshawar (WSSP), Sunday operations and its extension to sub-urban areas. He said that Rs 4.5b allocated for development of Peshawar, mainly improvement and construction of Ring Road, new bus stand, uplift programmes and Regi Model Town.

Defending government's decision about increasing retirement age of employees, the finance minister said that decision to increase retirement age to 63 will help save Rs20 billion per annum. In addition, he said that at least 21,000 school teachers will be recruited during the fiscal year 2019-20.

A total of 1380 projects are included in ADP and allocations to new projects have also been increased from 13 percent of Rs10 billion last year to 34 percent (Rs37 billion this year). In the development budget, funding was made on priority basis keeping education and health on top of the list followed by roads and water supply schemes, Taimur explained. He said KP earmarked Rs9.5 billion for construction and improvement of small dams, flood protection walls, water supply schemes and canal road, Rs5.9 billion for tourism, youth and sports sector, science and technology and IT would get Rs0.64 billion. For Forestry sector, Rs4.8 billion earmarked, industries Rs1.5 billion and higher education has been allocate Rs5.7 billion. He said that Rs83 billion earmarked for merged districts, Rs24 billion for creation of 17000 new jobs and regularisation of the Levies and Khassadars in former tribal areas.

Taimur Jhagra said both federal and KP governments fulfilled their commitments to pay their 3 percent divisible pool share for development of the merged districts. He continued that KP had contributed Rs11 billion from its share of the Federal Divisible Pool for merged districts.

He informed that government had decided to expand Rescue 1122 services to four new districts namely, Lakki Marwat, Malakand, Shangla and Lower Dir. He said recruitment of 21,000 teachers to address problem faced by education department.

Rs319b earmarked for ADP

Rs162b for merged districts

12 percent cut in salaries of cabinet members

Rs95b saved through austerity measures