The main focus of the provincial budget 2015-16 is to ensure maximum ease for the poor, youth empowerment, overcoming energy crisis, increased agricultural produces, infrastructural development and a viable tax regime, said Punjab Finance Minister Dr Ayesha Ghous Pasha on Saturday while addressing the post-budget press conference.
Pasha said that the salient features of the Punjab’s Economic Growth Strategy are: raising provincial development growth to 7-8 per cent by 2018, creation of one million jobs annually, double the private investment in the province till 2018, taking all possible measures to eliminate terrorism, to ensure protection to the life and property of the masses and to raise export volume by 15 percent.
TAX REDUCTION REGIME FOR SMALL TAXPAYERS:
“The government has initiated the tax reduction regime for small taxpayers and non-formal businesses under which the General Sales Tax (GST) on services has been reduced,” the minister said while talking about government’s initiative to lessen tax burden on middle class.
She said that GST on the services of laundries and dry cleaners, car/automobile dealers, auto workshops, electric/electronic home appliances workshops, healthcare, gyms and fitness, tour operators and travel agent, hair cutting saloons, property dealers, construction services for individual residential dwellings, and services by accountants, auditors, actuaries, tax consultants, company secretaries, receivers, liquidators, auctioneers and corporate law consultants has been reduced to 5 from 16 per cent.
She added that 2% GST was imposed on services provided to the textile, leather, surgical and sporting goods sectors in respect of manufacturing or processing on toll or job basis (against processing on conversion charges) and 10 percent on the services of franchises.
Dr Pasha said that the notification regarding levying of tax on the Internet services has been withdrawn. The Internet was totally tax-free, she added.
TAX LEAKAGES TO BE PLUGGED:
She said the leakages in the revenue collection machinery were being plugged through computerisation and adopting modern tax methodologies, adding that reforms were being introduced in all public sector departments.
“We are trying to make development approach more operational,” she said.
For the first time, the minister said, 0.9 % Infrastructural Development Cess (IDC) was levied in the province on the total value of imports/exports with revenue collection target of Rs 5 billion. The IDC had already been levied in Sindh and Khyber Pakhtunkhwa.
Replying to a question, Dr Aysha said that the Punjab Revenue Authority (PRA) could not achieve its target mainly due to launching of 3G and 4G technology in the telecom sector.
The PRA chairman, who was also present, said the mobile phone operators paid the tax to the federal government on import of equipment for 3G and 4G spectrums, while the provincial government was to get tax on services. They had to make adjustment so that there should not be double taxation and this fiscal gap/deficit amounted to Rs 20 billion.
Secondly, she said, “We were in formative phase and now we are formulating laws and taking mass/substantive measures to plug tax leakages.”
She said that now the taxpayers would be rewarded through various schemes while the tax evaders would be made to realise their responsibility.
EDUCATION, HEALTH, LAW AND ORDER TOP PRIORITIES:
Dr Ayesha said that the education, health and agriculture sectors, and law and order were among top priorities of the Punjab government.
“That is why 27 % of the total budget has been allocated for education, 14 percent for health, 12.5 percent for agriculture sector and 9.5 percent for maintenance of law and order during the fiscal year 2015-16,” she said.
She added that a total of Rs 310.20 billion would be given to the education sector, both at provincial and district levels. Similarly, Rs 166.13 billion had been allocated for health sector, Rs 144.39 billion for agriculture sector and Rs 109.55 billion for maintenance of law and order.
MORE FUNDS FOR ENERGY PROJECTS:
Dr Pasha said that the government was spending a hefty grant of Rs 258 billion on ongoing energy projects in the province, asserting that the federal and Punjab governments were executing energy generation projects worth Rs 618 billion in the province, while China would invest Rs 360 billion in these projects.
The minister said that under-completion energy projects in Punjab included 1320 MW coal-fired power station at Sahiwal worth Rs 180 billion, 1000 MW Quaid-e-Solar Park, which is currently generating 100 MW electricity at Bahawalpur at a cost of Rs 145 billion and 300 MW coal power project worth Rs 45 billion at Pind Dadan Khan. These three projects, she added, would be generating accumulative 2620MW electricity till year 2017.
She said that the government is also initiating 1200 MW gas-fired power project at a cost of Rs 110 billion in Sheikhupura and it would be fully inducted into the power system by 2017.
However, she said, a grant of Rs 15 billion had been allocated for the project in the fiscal year 2015-16.
The provincial government, she added, was also working on small power projects, as work had been started on coal-fired projects of 110 MW at Sundar Industrial Estate Lahore and Faisalabad Industrial Estate. Both the projects would cost Rs 33 billion, she added.
“I have firm belief that these energy projects will prove to be helpful in overcoming energy crisis substantially and rid the people of load-shedding,” she said.
GOOD NEWS FOR RURAL AREAS:
Dr Pasha said that the government has earmarked Rs 52 billion for the Chief Minister’s Rural Roads Programme, Rs 4.58 billion for Punjab Irrigated Agricultural Productivity and Rs 5 billion for agri tractors during financial year 2015-16.
The Punjab government, he said, had initiated Rs 150 billion Chief Minister’s Rural Roads Programme for which a grant of Rs 52 billion would be allocated for the next fiscal year. The project was aimed at ensuring speedy and inexpensive transportation of agri produces from fields to markets, she maintained.
The minister said that the government had for the last few years been implementing Rs 21 billion mega project – Punjab Irrigated Agricultural Productivity Improvement project.
Under this project, she said, drip and sprinkler irrigation system installed over an agricultural area of 120,000 acres and 9,000 water courses were streamlined. For the fiscal year 2015-16, she added, Rs 4.58 billion have been allocated for the project.
The government, she said, would also give a total of Rs 5 billion for the provision of 25,000 tractors to small farmers/growers on subsidised price on merit and in transparent manner.
It has also been proposed to allocate Rs 1 billion for the provision of agricultural equipment to the farmers.
She said that under a comprehensive programme, barrages were being repaired and rehabilitated in the province.
“The Jinnah Barrage will be rehabilitated at a cost of Rs 12.67 billion while Rs 900 million has been allocated for the purpose for the fiscal year 2015-16. Khanki Barrage would cost Rs 23.44 billion and in the next fiscal year, a sum of Rs 6.15 billion has been allocated for it,” she elaborated.
She said that a phased programme of Rs 8 billion has been prepared to protect Sialkot, Kamonke and adjoining settlements from floods.
DRINKING WATER SYSTEM TO BE IMPROVED:
The minister said that the government has allocated Rs 11 billion for various drinking water schemes in the province for the financial year 2015-16. In three year, more than 400 million villagers would have safe and clean drinking water facility that would cost Rs 17 billion.
MORE CASH FOR MINORTIES, KHUD ROZGAR SCHEME:
Dr Pasha said that the government has increased the budget for minorities up to Rs 1 billion for the fiscal year and this amount would be spent on the welfare of minorities.
She said that the government has allocated Rs 2 billion for the ongoing Chief Minister’s Khud Rozgar Scheme for provision of interest-free loan up to Rs 50,000 to the poor individuals for starting their own business/work.
Punjab Social Protection Authority, which had been established to ensure social and fiscal protection to the low-income class, would launch its first project at a cost of Rs 2 billion under which the disabled would be given stipends for their social and financial well-being.