KP budget proposes increased tax on naswar

PESHAWAR: The Khyber Pakhtunkhwa government has presented a budget of over Rs900 billion for the fiscal year 2019-20 in which a proposal has been made to increase tax on naswar.

The provincial government has proposed 50 paisa cess-tax on one kilogram naswar after which its price is likely to increase slightly.

Prior to the budget, the Capital Administration and Development (CAD) suggested to the KP government to increase tax on naswar to increase its revenue. The proposal suggested that the government must bring naswar under tax net and naswar-making mini factories must be registered by the owners.

A large number of people in KP consume naswar and the commodity is being sold in every nook and corner of the province, particularly in Pakhtun areas. Its use is even higher in the newly merged tribal districts. Despite ban on the use of naswar in schools, colleges, offices and other public places, its use is widespread in KP.

The government has also proposed increase in taxation rate on private companies and businesses. The budget proposes to impose taxes of Rs27,000 to Rs100,000 per annum on businesses worth Rs10 million to Rs200 million, respectively.

Tax proposals include Rs40,000 annual tax on departmental stores, R10,000 on electronics shops, Rs2,000 on tobacco wholesalers, Rs1,500 to Rs3,000 on fitness clubs, Rs8,000 on service stations and Rs100,000 on private medical and engineering colleges. The tailors who stitch shalwar kameez suits will have to pay Rs10,000 per year, while those who stitch trousers and shirts will have to pay Rs15,000 annually in taxes.

Dentists will pay Rs15,000 per annum, general physicians Rs10,000 and specialist doctors in Peshawar Rs80,000 per year and in areas other than Peshawar, divisional and districts headquarters Rs50,000 per year. Annual tax on marriage halls will be Rs60,000 and on restaurants and hotels Rs40,000.

KP Finance Minister Taimoor Saleem Jhagra said in the budget speech that the taxation target is 54 percent higher than the revised budget estimates of the current fiscal year.

A total of 1,380 projects have been included in annual development programme (ADP) and allocations to new projects have also been increased from 13 percent to 34 percent.