PUNJAB Government has presented a relief-laden budget
for the financial year 2020-21 envisaging total outlay of
Rs2.24 trillion , a nominal increase of 1.5% in running expenditure and a development outlay of Rs337 billion. In line with the policy of the federal government, the Punjab government also decided not to give any salary raise to the government employees or any increase in pension. Four per cent tax was imposed on online taxi services but, tax for twenty services has been reduced from 11% to 16%.
The budget has obviously been prepared and announced in the backdrop of Covid-19 requiring adjustment of priorities and plans and that is why there is focus on health sector, which surely needs more attention and allocations to withstand pressure in a similar situation in future. Higher allocations were made for social protection and relief to the needy while resources have been earmarked for human capital development as no significant progress is possible without proper and adequate investment on human development. Agriculture development and food security measures were given special attention and the public-private partnership (PPP) was introduced on identified and commercial viable public sector programmes. The PPP projects would be free of sales tax on services for five years. Twenty service-providers for which tax is being reduced from 16% to just 5% would welcome the move as it would provide them significant relief. These sectors – hotels, guest houses, marriage halls, lawns, caterers, IT services, tour operators, gems, property dealers, rent a car service, cable TV operators, treatment of textile and leather services, commission agents related to commodities, auditing, accounting and tax consultancy services, photographers and parking services – directly deal with the masses and the authorities would, hopefully, ensure that there is trickledown effect of the tax reduction. Tax on online taxi services, on the one hand, contradicts claims of the government that it is a tax-free budget and on the other hand it would mean increase in fare for people. The Government has apparently tried to safeguard interests of taxis that have been feeling pains of huge popularity of the online taxi services. The move is retrogressive and needs to be reversed. Similarly, while relief has been provided to other segments of the society, the provincial government thought it appropriate to leave government employees and pensioners in the lurch.
