LAHORE: The Punjab government has taken a number of initiatives to improve the provincial economy, and drafting of Punjab's Fiscal Responsibility and Debt Management Act is one of them which entails key covenants for prudent fiscal and debt management, said a report released by the Punjab Finance Department.
The Punjab government released its two-year performance report 'Innovations and Reforms Performance Review 2018/19 and 2019/20' in which the performance, initiatives and achievements by Punjab Finance Department have been highlighted.
Talking about the efforts related to the provincial debt management, it said the 'draft act' had been finalised after consulting with the federal government and with extensive technical and legal support from the World Bank. "It lays down the framework for raising financing/issuance of guarantees and compliance with medium-term fiscal framework and medium-term debt management strategy of the government," it added.
To bolster fiscal resilience and to support the development of efficient local capital markets, the finance department developed a framework to promote the issuance of provincial debt securities similar to the federal government bonds and T-Bills. "Governing rules for provincial debt securities have been drafted and subsequently endorsed by the State Bank of Pakistan. Subject to the Finance Division's approval, the Punjab government is ready to issue Pakistan's first provincial public bond or Sukuk," the report said.
According to the report, the Punjab government made efforts to rationalise subsidies by developing a framework for service sector entities, such as WASAs, PHAs, WMCs and transport sector, to work towards a robust business model for self-sustainability.
"In the case of WASA, a self-sustainability plan was developed in which it was decided that subsidy will be eventually phased out within two to three years through various measures, such as tariff rationalisation.
"Moreover, in the transport sector dependency on subsidy will be reduced through increased fare and lease of advertising space on metro buses and stations. For the first time in over 10 years, tariff revision with in-built yearly increments was introduced," it added.
The report touched upon the usage of information technology for improving citizen delivery system and ease of doing business in Punjab. It said that by introducing ePay Punjab, a platform for electronic payment, Punjab became the first-ever government payment aggregator in Pakistan for public-to-government (P2G) and business-to-government (B2G) payments.
"Currently, citizens can make payment through alternate delivery channels (internet banking, mobile banking and ATM) of 24 banks and over the counter branches of 28 banks in Pakistan. Since its launch in October 2019, 234,223 app downloads and more than 822,000 transactions, financial transactions worth Rs 4.28 billion have been performed through the application," it added.
At present, ePay Punjab was launched with 15 levies, including token tax, motor vehicle registration, motor vehicle transfer, professional tax, cotton fee and property tax. The finance department is working on adding more levies to be integrated within this system.
To facilitate taxpayers, the government is working on the option of tax payment through credit and debit cards on ePay Punjab portal. "Currently negotiations are under way with four banks and it is anticipated that the facility will be available by September 2020. Moreover, payments through direct debit from a bank account and telecom mobile wallets based payments shall also be supported," it added.
For the support of the construction industry and housing sectors in Punjab, the report said, rate of PSTS on property builders, developers and promoters was reduced to Rs 100 per square yard Rs 50 per square foot. Moreover, they were also given an exemption from Sales Tax on construction service.
In encouraged the private sector to invest in government projects, public-private-partnership (PPP) projects were exempted from tax on services for FY 2019-20. "Exemption has now been extended till June 30, 2025, to PPP projects that are operational or will become operational during FY 2020-21," it added.
Touching on the government's performance on revenue generation, it disclosed that during 2019-20, tax collection in provincial taxes was on track for more than 20 percent growth.
"And despite giving sizable tax relief owing to the emergence of Covid-19, tax collection of provincial taxes in FY 2019-20 remained at the level of previous year's collection," it added.
"Moreover, austerity measures for the FY 2018-19 and FY2019-20 were introduced and saved funds to the tune of more than Rs 1.8 billion in two fiscal years," it added.
Copyright Business Recorder, 2020
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