The Punjab Revenue Authority (PRA) has estimated to collect Rs 95 billion in financial year 2014-15 as against Rs 62.3 billion for financial year 2013-14 which is 52.4 percent higher than the last year owing to the still untapped potential in the sales tax net.
The authority also plans to establish Punjab Government Revenue Automation Limited (PGRAL) on the analogy of Pakistan Revenue Automation Limited (PRAL), approval of which has already been granted to it by the Punjab government, official budget document reveal.
PGRAL would work in close collaboration with Punjab Information Technology Board and undertake rigorous programs for process-reengineering and automation of other provincial taxes before their regular transfer to PRA. PRA has already finalized the enforcement rules and reward rules.
The Authority has already developed a complete system for real time monitoring of transactions in food sector services. PRA will soon apply a scheme of Restaurant Invoice Monitoring System (RIMS).
After commencement of VAT-like sales tax on hotels, continuation of bed tax remains no more justified. Bed tax is therefore, being abolished. However, sales tax threshold exemptions on hotels are being reviewed so as to enlarge the outreach of sales tax and broadening of sales tax base. This will also help promote economic documentation of hotels sector in the province.
Ten new services have been incorporated in the sales tax net. Most of these services were either being partially taxed as part and parcel of taxable services of other business domains or were failing to discharge tax liabilities in respect of the taxable component of their main business activities. Inclusion of these new services will also further bring equity in the Punjab sales tax base and also harmonize the service tax system of Punjab with other provinces.
Punjab Revenue Authority (PRA), created in July 2012, is primarily tasked to collect Sales Tax on Services. The Authority has demonstrated promising potential of growth since its inception. It continues to expand tax base with an aim to enter a negative tariff regime in the coming years. More and more services are being brought in to the tax net. The organization is building its capacity so that it can expand coverage in the major urban centers in Punjab. Its organizational strength is being further augmented through a range of subordinate legislation that will make PRA more effective in increasing the provincial own source revenues. Apart from PRA, government is also focused on improving the tax collection of Excise and Taxation Department and Board of Revenue.