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Thursday March 28, 2024

Rs4.2b sales tex onservices collected in six months

By Riaz Khan Daudzai
January 19, 2017

 Rs1.46b still stuck with professionals including doctors, lawyers and contractors

PESHAWAR: The Khyber Pakhtunkhwa Revenue Authority (KPRA) has collected Rs4.238 billion in Sales Tax (ST) on services in the first six months of the current financial year 2016-17, that’s a little less than half of Rs10 billion target given to the Authority by Finance Department for the fiscal ending on June 30.

The authority still has to collect Rs5.762 billion in the remaining sixth months of the fiscal to meet its target.Coming within an inch of achieving its half yearly target of revenue collection, it is believed that meeting the target of Rs10 billion would not be an easy going for the KPRA by the end of the current financial year, for its over a billion rupees are still stuck with just four categories of professionals.

An official, who shared the document regarding the collection with The News but requested not to be named, said the KPRA was facing a number of hurdles in collecting ST on services in the province. He said the authority was under staff and short of resources to meet its collection target.

Established in 2013, the KPRA besides other functions has been tasked to include new services in the ST net and identify existing potential service providers in the tax net.The official said that achieving the target for the KPRA would seemingly be an uphill task as its Rs1.46 billion are still stuck with the four services groups, printers-publishers, contractors, doctors and lawyers, who have gone into litigation against the Authority.

He further said there was a possibility that the Authority would get the stuck-up amount as the Peshawar High Court (PHC) has clubbed 25 cases regarding the ST on services and soon a decision on the same would come.

However, he hastened to add that the government has yet to hire any law firm to contest its case in the PHC that might adversely affect its case in the court.

The Authority is authorised to collect ST from 58 services in the province, including workshops or undertakings, advertisement, airport services, architects, banks, beauty parlours’ carriage of goods, consultant, contractors, courier services, custom agent, event management, franchise services, hotel and restaurant, insurance, manpower, motor and vehicles, oil and gas, pharmaceutical, printers, rent-a-car services, security services, telecom and withholding agent.

However, the telecom sector remained to be its main contributor over the last three years. But the trend in collection, as indicated by the document, also remained positive as during the year 2013-14, 94 percent of the recovery was realised from the Telecom alone, followed by 70 percent in the 2014-15 and 58 percent in 2015-16. During the first two quarters of the current fiscal, the contribution of Telecom dropped to 56 percent, suggesting that the density of tax collection is shifting from Telecom to multi-sector revenue contributors.

The trend in overall collection of ST on services has also been showing steady improvement in terms of numeric as well as subjective manner over the last three and half years.In the 2011-12 fiscal, the Federal Board of Revue (FBR) collected Rs4.190 billion in ST on services in the province and Rs4.741 billion in 2012-13 financial year.

On the first year of its establishment, the KPRA was given the target of Rs8 billion for the 2013-14 fiscal and it could collect Rs6.063 billion.

In 2014-15 fiscal it was given the target Rs12.00 billion and could pouch Rs6.279 billion in last fiscal 2015-16, its target was lowered to Rs8.00 billion and the Authority could manage to collect Rs7.269 billion.

For the current 2016-17 fiscal, the Finance Department has given the target Rs10 billion for ST on services to the KPRA and as of July-December quarters it could collect Rs4.238 billion.

The document shows that the number of taxpayers has also gone up to 698 in 2015-16 against the 200 professionals who could be brought into the tax net in 2012-13.