Khyber Pakhtunkhwa govt burdens salaried class with taxes

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The Khyber Pakhtunkhwa government has raised the ratio of provincial taxes by making amendments to various laws pertaining to the stamp duty, professional institutions, business establishments, agriculture income and salaries.

Finance Minister Sirajul Haq presented the provincial budget for fiscal 2014-15 in Khyber Pakhtunkhwa Assembly on Saturday.

According to the Finance Bill, the government has levied an annual tax of Rs330 on all those persons engaged in any profession and trade having an income of Rs10,000, but not exceeding Rs20,000. “A person whose income is between Rs200,000 and Rs500,000 will be liable to pay Rs10,000 tax per annum,” it stated.

Employees of the federal and provincial governments drawing pay in basic pay scale 1 to 4 have been exempted from tax. All employees from BPS-5 to BPS-20 and above will pay tax. The BPS-20 and above grade officers will have to pay Rs20,000 tax a year.

All limited companies, modarbas, mutual funds and other corporate concerns with paid-up capital and reserves in the preceding year and with income not exceeding Rs10 million will have to pay a tax of Rs18,000. Each will have to pay Rs100,000 if the income exceeds Rs200 million.

Persons other than limited companies, owning factories, commercial establishments, private educational institutions and private hospitals are liable to pay tax. Any commercial establishment having 10 or more employees will have to pay Rs10,000 tax, while private hospitals having up to 50 employees will have to pay Rs50,000 tax a year. Each of the private medical colleges and private engineering institutes running degree programmes will have to pay Rs100,000 tax.

Private business educational institutes having up to 100 students will have to par Rs70,000 and private law colleges Rs100,000 tax, while education institutes charging monthly Rs5,000 per student will have to pay Rs100,000 per annum.

The government has also levied tax of Rs4,000 on holders of import or export licence, who has an income of Rs50,000 in the preceding year. A clearing agent or approved custom house agent will have to pay Rs10,000 per annum. An IATA approved travel agent and hajj and tour operator will have to Rs15,000 annual fee each.

The government has also levied tax on restaurants/guesthouses and professional caterer, who will be paying Rs15,000 annual tax. The wedding halls will be charged Rs30,000 a year. Specialist doctors and dentists will have to, respectively, pay Rs20,000 and Rs15,000 professional tax a year. Besides this, diagnostic and therapeutic centres, including pathological and chemical laboratories, are also included in the tax net.

The petrol/diesel/CNG filling stations, video shops, real estate shops/ agencies, car dealers and net cafes, chartered accountants, vehicle service stations, transporters, members of stock exchange companies, money changers, jewellers, cable operators, printing presses, pesticides dealers, health fitness centers/gymnasium, departmental stores, electronic goods stores and tobacco whole sellers have been levied with various ratios of taxes ranging between Rs1000 and Rs15,000.

On the one hand, the government has announced 10 per cent increase in the salaries, on the other it imposed various taxes on the salaried class. Finance Minister Sirajul Haq, during his budget speech, said that it was a tax-free budget, but taxes imposed on services and trades belied his claim.