Highlights of Punjab budget 2019-2020


Punjab government has presented the surplus budget for 2019=2020 with 350 billion rupees allocation for development.

Taxation Measures

  • Government has proposed taxes on businesses and professions previously not falling into the tax net. Moreover, a number of existing taxes, including stamp duty have also been increased.
  • The government has proposed bringing all stock brokers, money changers, doctors, hakeems, homeopaths, contractors, builders and property dealers into the tax net.
  • Company with up to Rs-5 million liquidity has been proposed to pay Rs-10,000 annual tax,  up to Rs-50 million Rs-30000, up to Rs-100 million Rs-70,000 and more than Rs-100 million liquidity will pay Rs-100000.
  • An annual tax of Rs-1500 has been proposed on factories with workforce of up to 10 persons, Rs-5000 on those employing 25 and Rs-7500 on those employing more than 25 persons.
  • Government has also proposed Rs-1000 tax on lawyers, Rs-2000 on jewelers and cable operators, Rs-4000 on health clubs/gymnasiums in metropolitan limits and cigarette/tobacco dealers, Rs-6000 on audit firms, taxation consultants, architects, money changers, engineering and scientific consultants, Rs-6000-10000 on motorcycle/scooter dealers, Rs10,000 on stock exchange members, Rs-10000 on motor car dealers and real estate agents in small cities and Rs-20000 on those working in metropolitan corporation limits.
  • The provincial government also proposed Rs-20000 tax on recruiting agents, Rs-1000 on contractors/builders with business volume of up to Rs1 million and Rs6,000 on those exceeding the said volume.
  • It proposed Rs-5000 tax on medical consultants/specialists and dental surgeons, Rs-4000 on registered medical practitioners and Rs-4000 on homeopaths and hakeems.
  • Giving the reasons behind revising tax rate and imposition of new ones, the government stated it was aimed at broadening the tax net.
  • Tax has also been proposed on high value properties along highways and motorways in order to broaden the tax base. Registration fee for imported vehicles has been increased and brought at par with that being charged in Islamabad and other provinces to ensure uniformity of fees and rates across Pakistan. The government said that apart from change in some penal provisions, these amendments provide for minimum tax  liability, updating of appeal related provisions, improvement in recovery of tax and introduction of a modern electronic invoicing system to plug revenue leakages.

Descriptions of some taxable services have been modified for removal of gaps and misapplications and updated for a clearer understanding of tax obligations, it said. Moreover, some new services have also been included in the tax net.

The overall objective is to broaden the tax base of Punjab Sales Tax on Services, to achieve eventual goal of a Negative Tariff List for Punjab Sales Tax and maximizing mobilization of revenue in public interest, the government maintained.

Social Security Measures

  • Property tax relief has been proposed for divorcee women and single female orphans in line with relief already being provided to widows; and outdated rates of Professional Tax have been proposed to be rationalized. Work on Fatima Jinnah Institute of Dentistry, a project put under the carpet by the previous regime for political reasons is being started
  • Rs-2 billion has been allocated for extending Health Insaf-Card scheme to 36 districts in the current fiscal year.
  • Under Punjab Ehsas Program,  Rs-3-billion has been allocated for giving Rs-2000 monthly financial support to elderly people, Rs-3.5 billion for supporting 2 lakh disabled people, Rs-2-billion for supporting widows and orphans under Surparast program, Rs-200 million for welfare of transgender, Rs-100 million for rehabilitation of acid attack victims, Rs-8 billion for financial empowerment of women and Rs-300 million for financial support of families of civilian martyrs of terrorist attacks.
  • After the success of Panagah project, he said, nine Panagahs would be set up at divisional headquarters.

 Details of sectoral allocations

The Rs2.3 trillion budget presented at the Punjab Assembly is slightly bigger than last year’s Rs2.026 trillion financial outlay.

Allocation of Rs-350 billion has been proposed for development while Rs-1.717 trillion has been put aside for non-development expenditures.

General revenue receipts for FY 2019-20 were estimated at Rs1.99 trillion, while the province was expected to receive over Rs1.60 trillion under the National Finance Commission (NFC) award.

Total provincial revenue was estimated at Rs388.4 billion. Total estimate for ongoing expenditures was Rs-1298.8 billion, containing Rs337.6 billion for salaries, Rs244.9 billion for pension, Rs437.1 billion for local governments and Rs279.2 billion for service delivery. Rs-233 billion would be surplus that would help overcome the national budget deficit and the same would be available in the coming fiscal year.

Allocation of Rs-350billion has been proposed for development which was 47 percent more than the outgoing financial year. 35 percent of the development allocation would be spent in southern Punjab.

Rs-125 billion has been allocated for social sector, Rs-88 billion for infrastructure development, Rs-34 billion for production, Rs-21 billion for services and Rs-17 billion for other sectors. He said that Rs-42 billion has been put aside for public-private partnership and Rs-23 billion for special programs.

The minister said that the government has proposed allocation of Rs279b for the health sector which was 20 percent more than the outgoing fiscal year. He said that Rs40b has been allocated for the establishment of nine state of the art hospitals in Lahore, Layyah, Rawalpindi, Mianwali, Rahimyar Khan, DG Khan, Multan, Bahawalpur and Rajanpur.

Education

Rs-383billion has been allocated for education. evening shifts under Insaf School Program would help improve literacy rate.

Six new universities would be set up in Murree, Chakwal, Mianwali, Bhakar, Rawalpindi and Nankana Sahib.

Work on 63 colleges would be completed at a cost of Rs-2billion. The minister said that Rs1.76b has been allocated for providing missing facilities at 68 colleges.

He said that Rs8b has been allocated for Aab-e-Pak Authority for providing clean drinking water in rural and far flung areas.

Agriculture

Rs40.76b has been allocated for agriculture, which is more than double of the previous year’s allocation.  Rs7.85b has been allocated for subsidy on fertilizers and seeds, e-credit and crop insurance.

 Model auction markets would be set up besides issuance of AGRI-SMART card for bringing subsidy in the direct access of growers.

Forest department would plant 550m trees during the next five years. Rs3.43b have been allocated for this purpose.

Industry

Government has planned setting up Allama Iqbal Industrial City in Faisalabad. Another  industrial park would be set up in Muzaffargarh on public-private partnership and a small industrial park in Taunsa.

Revenue

  • Revenue target set at Rs-388 billion
  • Rs-1601 billion to come from NFC award
  • Rs-350 billion allocated for development
  • Rs-1717 billion for non-development outlay
  • Expected surplus Rs-233 billion

Sector-wise allocations

  • Rs-383 billion for education
  • Rs-279 billion for health
  • Rs-125 billion for social sector
  • Rs-88 billion for infrastructure development
  • Rs-42 billion for public-private partnership
  • Rs-40.76 billion for agriculture
  • Rs-34 billion for production
  • Rs-23 billion for special programs

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