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January 2, 2021

PRA claims unprecedented revenue growth

Lahore

January 2, 2021

LAHORE:The Punjab Revenue Authority (PRA) collected Rs73.7 billion from July to December 2020 registering a phenomenal growth of 41.6 percent over the Rs 52.1 billion collected in the first half of the corresponding period of the previous financial year.

The PRA witnessed unprecedented revenue growth despite a huge tax relief package was given by the Punjab Govt through the Finance Act, 2020 wherein the rate of Punjab Sales Tax on Services (PSTS) on more than 25 services was reduced to support COVID-affected sectors, boost compliance and encourage documentation.

The Government of the Punjab reduced the rate of PSTS from 16 percent to 5 percent for various sectors that were affected by the outbreak of the COVID-19 pandemic, including marriage halls and lawns, small hotels, caterers, tour operators, rent-a-car services, photographers, gyms and manpower recruitment services. In addition, the rate of PSTS on health insurance, medical consultancy and hospital charges was reduced to zero percent to cut the cost of healthcare for the public.

The govt also reduced the rate of sales tax on restaurant and beauty parlor services from 16 percent to 5 percent in case of payment through credit/debit cards. This widely-appreciated move was aimed at promoting documentation of the economy and has started to pay dividends as the proportion of customers using cards for payment is on the rise. PRA’s performance is a vindication of its policy of minimum human interaction, reliance on Information Technology and creating a culture of cooperation and collaboration with all stakeholders.

PRA is by far the most automated organization in the Punjab as its registration, return-filing and tax payment processes are completely automated. It was the first Provincial Revenue Authority to implement Sales Tax Real-time Invoice Verification (STRIVe) system and is the only Provincial Revenue Authority to have implemented Electronic Invoice Monitoring System (e-IMS). These two systems combine to enable pre-population of returns promoting ease of doing business as well as minimizing tax fraud.

Finance Minister Punjab Makhdoom Hashim Jawan Bakht appreciated the performance of PRA and stated that generating own source revenue remains a top priority for his government.

The Chairperson PRA Zainulabid Shahid attributed all credit for the performance to the team and the immense support from the Finance Minister Punjab. He said that he was confident that the PRA team would continue to work hard and achieve the assigned revenue target for the Financial Year 2020-21.

financial reforms: Maintaining the annual development budget during corona was a major challenge which the Punjab government handled amicably. By the end of the financial year, more than 90% of the development budget would have been utilized.

These views were expressed by Punjab Finance Minister Makhdoom Hashim Jawan Bakht during a briefing on the performance of the Finance Department in the year 2020.

The provincial minister said that the financial reforms being introduced to improve the administrative affairs of the province would lead to an increase in the growth rate. The 30 304 million plan with the World Bank to reform the public finance management system will ensure improved service delivery in the province.

The provincial minister added that for the past several years, a large part of the budget had been focused on pensions. The tireless work of the finance department has made it possible to increase the personal resources of the province by Rs. 59 billion through pension reforms. In the year 2020, a historic programme of Rs. 55 billion was launched for the development of backward districts to eliminate inequality from the province.

A separate secretariat was set up to fulfill the promises made to the people of South Punjab. Colour financing of the region's budget is another major initiative of the Punjab government. Tax relief in the construction industry and construction sector has secured the employment of daily wage workers.