Rs 923b tax-free KP budget presented Highest ever allocation of Rs 124b for health sector


Tariq Saeed


The Pakistan Tehreek-e-Insaaf led Khyber Pakhtunkhwa Government Friday presented Rs 923 billion tax-free budget for the fiscal year 2020-21 with a huge allocation of Rs 124 billion for health sector in the backdrop of Corona pandemic that has led to the economic meltdown all over the world.
The total outlay of the budget stands at Rs 923 billion including Rs739.1 billon for settled districts and Rs183.9billion for merged districts, Rs317.8bln for development expenditure including Rs221.9 billion for settled districts and Rs95.9 billion for merged tribal districts.
Khyber Pakhtunkhwa Finance Minister Taimur Saleem Jhagra while delivering his budget speech in the Assembly, said, Khyber Pakhtunkhwa was badly affected with the pandemic as over 20,000 people were infected with the Covid-19 and nearly 800 succumbed to the deadly virus. “The economic impact of the coronavirus is also relentless. We face the worst global economic recession since 1929”. The minister said adding, “We’re now living in a world of lockdown and partial lockdown which has reduced trade and travel, created unemployment in the private sector, and has put pressure on the government revenues, besides leading to an increase in expenses on emergency response.
In the ongoing expenditure, the Finance Minister said that a total of Rs605.2 billion were allocated that includes Rs517.2 billion for settled areas and Rs88 billion for merged districts.
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.
The minister said that within a month, the government will sign a contract for our Universal Health Insurance programme, meaning every family in KP will have access to over Rs1 million insurance Sehat Insaaf Card program adding the health budget will be supplemented by Rs24 billion contingency fund for expenses related to Covid-19, including Shuhuda package for frontline workers, core costs such as PPE procurement and testing, relief operations, spending on poor through Ehsaas programme. Out of the total amount, Rs15 billion would go for settled districts and Rs9 billion for merged areas.
“We will redouble our efforts to combat not just Coronavirus but also polio, dengue, as well as routine immunization efforts. To do all this, we will make major investments in strengthening the department and its organization,” said the minister.
The provincial government has also allocated Rs36 billion for operations and enhancement of flagship tertiary hospitals, including Rs26 billion as core budget of MTIs, Rs4 billion for completion of major projects, Rs6 billion as a top up challenge fund for MTIs to claim.
The KP Revenue Authority witnessed a growth of around 81 percent year-on-year, and even after Covid will end year at a record over Rs17 billion collection, informed the minister.
“We were witnessing record-breaking growth of overall provincial revenue receipts of 38pc last year before Covid-19,” said Jhagra. With impact of Covid-19, growth has reduced, he said, but we still expect overall revenue collection to finish at over Rs36 billion.
Jhagra said the Budget 2020-21 being a tax-free budget with no new taxes have been imposed and no increase in major tax rates affected.
Excise department is withdrawing provincial taxes completely in a number of areas where double taxation was occurring, said the minister. There will be zero bed tax for hotels, zero professional tax for 18 categories of professionals, provided they register with KPRA.
The minister added that there will also be zero professional tax on all medical professionals and services. The entertainment tax is being permanently abolished, informed Taimur.
To encourage increased car registrations, re-registration will be free of cost with no NOC required from the originating province, said Taimur.
The provincial government has reduced Sales Tax on services in 27 categories. More so, for restaurants where payment of 8pc has to be made, if they use the point of sales software, the sales tax rate will go down from 8pc to 5pc, informed Taimur.
The Finance Minister said that in order to reduce expenses of government, no allocation for training and entertainment has been made, whereas, salaries and pensions of government employees will not be increased. The minister said that non-tax relief measures include the elimination of admission fees for both government primary and secondary education schools for girls and boys, and to professional government art colleges.