Let provinces tax the services sector, Punjab minister asks Centre

ISLAMABAD: Punjab Finance Minister Dr Ayesha Ghous Pasha has asked the federal government to withdraw taxes on services sector because it was domain of the provinces to slap these taxes.

“We will be able to resolve controversy with cable operators on imposition of services tax. The provincial government is ready to facilitate all sectors but they should also come forward to pay their due taxes,” Pasha said in an exclusive chat with The News last week here at Islamabad.

She said that every sector would have to come forward to discharge its responsibility by paying due taxes. In order to jack up provincial contribution into stagnant tax net, she said that Punjab would increase tax to GDP ratio from 0.9 percent to 1.3 percent of GDP during the remaining two and half year rule of the incumbent regime.

She said that the provincial revamped excise and property taxes in order to generate desired revenues to tap real potential. The minister came down hard on the federal government for imposing different taxes on services sector and said that instead of slapping multiple taxes, the provincial government was asking the Center to refrain from imposing Federal Excise Duty (FED) or other taxes on services sector. “The imposition of withholding taxes on services by the center is also unjustified,” she added.

Regarding nomination of provincial member into National Finance Commission (NFC), she said that Governor Punjab had approved nomination of the member which would be forwarded to federal government for reconstitution of NFC forum.

The NFC had become dysfunctional because this constitutional forum did not possess Punjab’s technical member. After assuming ministerial slot by Dr Ayesha Ghous Pasha, the seat of technical member representing Punjab fell vacant.

The minister said that the provincial government would raise the issue of multiple taxes on services sector at appropriate forum.     

She said that Punjab Revenue Authority (PRA) was working hard to expand narrowed tax base. “We conducted survey of more than 300,000 properties owned by influential people and found 100,000 as taxable entity,” she maintained.

When asked about increased spending on central Punjab and ignoring Southern part of the province, she dispelled this impression and made it clear that she provided all out resources to all parts of the province for the purpose of equity but effective utilization of development funds would also be ensured.

To another query regarding calculating provincial share in GDP growth, she said that they strengthened Punjab Economic Research Institute (PERI) and efforts would be made to come up with reports on Punjab’s share in GDP growth of the country.

Punjab Development Report (PDR), she said, would be launched to set direction of the province. She said that now the stage was set where the federal and provincial governments would have to focus upon generating growth and creating jobs after achieving stabilization of the economy.