KP Govt presents Rs 923 bn tax free Budget 2020-21

PESHAWAR (Dunya News) - The Khyber Pakhtunkhwa Government, on Friday, presented its annual budget worth Rs 923 billion with maximum allocation of Rs124billion for health, Rs317.8bln for development expenditure including Rs221.9 billion for settled districts and Rs95.9 billion for merged tribal districts.

Presenting the budget for financial year 2020-21 in the Khyber Pakhtnkhwa Assembly, the Finance Minister Taimour Salim Jhagra said that total outlay of the budget was pitched Rs923 billion including Rs739.1 billon for settled districts and Rs183.9billion for merged districts.

About the ongoing expenditure, the Finance Minister said that a total of Rs605.2 billion were allocated for settled ie Rs517.2 billion and merged districts ie Rs88 billion.

Regarding development expenditure, he said a total of Rs317.8 billion were earmarked including Rs221.9 billion for settled districts and Rs95.9 billion for merged districts.

He said a record Rs124 billion were allocated for health sector for settled and merged districts, adding the budget for settled districts have increased from Rs87 billion of outgoing fiscal to Rs105.9 billion for upcoming fiscal year.

For development budget in health sector, he said a total of Rs24.4 billion were allocated including Rs13.8 billion for settled district andRs10.6 for merged tribal districts.

He said Govt will focus to ensure adequate stock of equipment, medicines and increasing strength of doctors in public sector hospitals besides providing Sehat Insaf cards to every family of the province and in this regard Rs10 billion were allocated.

He said Rs36 billion earmarked for MTI hospitals including Rs26 billion for MTIs current budget and Rs4 billion for completion of key projects besides Rs six billion for special demand funds for improving healthcare system in major hospitals.

Shortage of infrastructure and equipment in basic health units would be overcome and for this purpose Rs13 billion project would be launched in collaboration with World Bank.

Similarly, budget has been increased from Rs2.5 billion to four billion rupees for procurement of medicines in healthcare facilities besides acquiring services of private sectors with allocation of Rs one billion for waste management of hospitals.

The Minister said separately Rs24 billion were allocated for emergency corona relief fund to combat the deadly virus. Out of the total amount, Rs 15 billion would go for settled districts and Rs9 billion for merged areas.
The Finance Minister said maximum relief has been provided in taxes in budget 2020-21, adding the reforms in the KP Revenue Authority(KPRA) has yielded results as the income has been enhanced from Rs10 billion to Rs17 billion.

Despite COVID-19 challenges, the total income was estimated as Rs36 billion for this year which is 20pc more than the last year and had COVID-19 not surfaced the total income would have crossed Rs45 billion.

Salim Jhagra said special aspect of the budget was tax relief and tax reforms, adding it was a tax free budget 2020-21 as neither new tax has been imposed nor tax rate was enhanced.

Highlighting tax relief measures, the minister said the local government department has abolished taxes on 200 SMEs.
Accordingly, excise and taxation department has also abolished concerned provincial taxes on small businesses and persons to avoid tax duplication, he said, adding hotel tax and professional taxes would be abolished on all hotels and more than 18 professionals provided these people get their business registered with KPRA.

“Entertainment tax has been abolished altogether.” To increase vehicles registration in KP, he said NOC’s condition from other provinces has been withdrawn.

Taimour Jhagra said sales tax rate on 27 categories has been reduced and restaurants which installed point of sales software tax rate would reduce from eight percent to 5pc.

The KP Government has decided to uphold incentives on CVT and stamp duty to promote construction sector.

“Those professional categories, which were registered with KPRA were exempted from taxes include import and exports licenses holders, clearing agents/customs house agents, travel agents, restaurants, guest houses, professional caterers, lawn or marriage halls, advertisement agencies, doctors, diagnostic and therapeutic centres, contractors, suppliers and consultants, petrol, diesel, CNG, filing stations, all establishment including video shops, real estate agencies, car dealers, net café, chartered accountants, service stations, transporters, stock exchange members, money changers, health centres, gymnasiums and cable operators,” he said.