K-P budget leaves hopes in the dust
Reportedly, the total budget for the upcoming fiscal year has been estimated at Rs2119 billion while the annual total expenditure has been estimated at Rs1962 billion. The budget has been kept at a surplus of Rs157 billion while the allocation for the annual development program has been kept at Rs547 billion. Despite some tax relief, the scope of new taxes and old taxes has been expanded in the budget.
According to the finance bill, a ten per cent property tax will be collected from institutions including government, semi-government, development finance, corporate, autonomous, public limited, public sector, private commercial, and distribution businesses, warehouses and guest houses in case of renting or leasing buildings or lands. Similarly, a fifteen per cent tax will be collected from all banks and financial institutions, five per cent from private hospitals, five per cent from medical stores and other businesses related to the health sector. Likewise, a five per cent tax will be levied on endowment land or property used for business purposes.
In an interview with The Express Tribune, economist and lecturer at the University of Peshawar, Dr Sanam Khattak cautioned that the proposed tax increases in both the federal and provincial budgets may be too heavy for the province to bear. "Extending the tax net would not only impact the business community but would also increase the prices of daily commodities.
Citizens are already burdened with multiple taxes like sales tax, duty tax, excise tax, TV tax, and numerous federal levies. Under such circumstances, the government should focus on offering tax relief rather than imposing further increases. With purchasing power drastically reduced, even the poorest families are struggling under inflationary pressure and taxes. Charging taxes on already unaffordable essentials goes against the principle of equity," explained Dr Khattak.
Dr Khattak further explained that given low purchasing power, stagnant incomes and small industry closures, a budget focused on tax hikes presented new economic threats to the province. "While the government aims to boost revenue, increasing taxes under current economic strains may lead to a "bubble effect", with businesses already suffering from energy crises facing further losses," predicted Dr Khattak.
Similarly, K-P Chamber of Commerce and Industry President Fazal Muqeem Khan opined that the increased taxes will not have a good impact on the business community. "Currently, half of the 500 factories in the Hayatabad Industrial Zone in Peshawar are closed while seventy per cent of industry in the Gadoon Industrial Estate Swabi is also nonfunctional. Facilities should be provided to small businesses and large units. The government should take interest in providing loans to traders from banks on easy installments, and not impose new taxes or increase the rate of old taxes," said Khan.
Conversely, K-P Finance Advisor Muzammil Aslam expressed his satisfaction with the recent budget. "Due to the opposition government in the province, the federation is not paying us the arrears. The government has achieved 93 per cent of the revenue generation target in the province. No new taxes have been imposed in the budget while some taxes have been reduced," claimed Aslam.
Criticizing the budget for rewarding its members, K-P Assembly Opposition Leader Dr Ibadullah claimed that the Assembly had not given even a single penny from the previous budget. "The opposition has been sidelined again. Development projects in the corruption-ridden province will again be a victim of corruption. The opposition was not even consulted in the preparation of this budget. The suggestions we had given were not discussed. This budget is nothing but a manipulation of words," lambasted Dr Ibadullah.
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