KARACHI: Chief Minister Sindh Syed Murad Ali Shah on Friday announced a budget of Rs3.056 trillion for the fiscal year 2024-25, up 34 percent, with new taxes of Rs76.8 billion, during the Sindh Assembly session.
Presenting the budget, he said: “Sindh needs a sustainable solution to its ever increasing financing needs.” He said that provincial receipts tax revenue is estimated at Rs661.9 billion for the next fiscal year as against Rs469.9 billion in the current fiscal year. “It calls for levying new taxes, rationalising the prevailing regime, assuring relief to poor segments, and capturing the potential revenue from the affluent sections.
Therefore, we have also proposed the levy of a few new taxes which are expected to generate additional revenue of Rs76.8 billion in FY25,“ he said adding that the Sindh government continues exploring avenues to finance the rising demand and cost of infrastructural development at concessional rates.
Sindh Budget: Govt employees, poor people to be given relief: minister
Budget outlay of provincial expenditure for the next fiscal is Rs 3.056 trillion that marks 34 percent increase over budget estimates of Rs 2.282 trillion in the current fiscal year.
On income side, Sindh eyes federal transfers at Rs1.901 trillion for the next fiscal year including Rs1.747 trillion for the divisible pool components, Rs106.4 billion for straight transfers and Rs46.9 billion for OZT grants, depicting a rise of 40.5 percent over budget estimates of Rs1.353 trillion in the current fiscal year. Current capital receipts estimated Rs21.62 billion, other receipts Rs416.923 billion and carryover cash balance Rs55 billion.
On the expenditure side, current revenue expenditure is proposed at Rs1.912 trillion, current capital expenditure Rs184.838 billion and provincial ADP Rs959.06 billion. The government has set a collection target for the sales tax on services at Rs350 billion for the next fiscal year up from Rs235 billion for this year.
Murad Shah informed the house that the revenue target for levies under excise and taxation is proposed for Rs203.8 billion, comparing to Rs143.27 billion last year.
The government also announced the non-tax revenue at Rs42.9 billion for the next the financial year, besides proposing an increase in sales tax by 2 percent to 15 percent from existing 13 percent to “harmonising the tax rates with other Service Tax Administrations in Pakistan. However, the exemptions and reduced rates of SST, where notified, shall remain effective”.
The chief minister proposed a reduction in the sales tax rate to 8 percent for the restaurant services involving customers’ payments through digital means like debit and credit cards, mobile wallet, QR scanning, etc.
Similarly, he said: “To promoting the Telecom services which pay high rate of 19.5 percent SST but utilize input items paying Federal sales tax of up to 18 percent (which was previously 17 percent), it is proposed to allow them the input tax credit of up to 18 percent instead of 17 percent at present.”
The government targets revenue of Rs35.900 billion annually for the excise and taxation as the resource mobilisation. “Our efforts are focused on taxing the affluent class. We have proposed enhancing the Luxury Tax of different values from Rs150,000 to Rs450,000 on imported cars of different engine capacity ranging from 1500 CC to 3000 CC,” he said.
The rate of Infrastructure Development Cess has been revised from 1.2 percent to 1.8 percent with revisiting the rate of Professional Tax from Rs500 to Rs2,000.
In addition, an increase in the Professional Tax on all petrol pumps and CNG stations has been proposed from Rs5,000 to Rs20,000. Besides, the government proposed an increase of Rs500 to Rs5,000 for amounts of transfer fee for different vehicles of capacity ranging from 800 CC to 2001 CC.
Murad also proposed an increase in fee under various articles such as acknowledgement of receipt, affidavit for declaration, memorandum of agreement, bill on entry, debentures, transfer of lease, duplicate charges, rent based lease license agreement, letter of credit, mortgage deed, policy of insurance including fire and sickness, indemnity, power of attorney, promissory note, settlement and trust. Besides, charges duty on air tickets and allotment has also been announced in the budget.
He said that the social development and international financial obligations require the government to raise additional funds through indigenous sources.
“Accordingly, this year we are going to present the Finance Bill. However, we have ensured to restrict its impact to a bare minimum on poor segments of society”. Rates of rents of suites and buildings under the Sindh Works and Services Department have been revised upwards with a proposal to increase the route permit fee, permit for goods vehicles and fee for stands.
The Sindh government proposed a 30 percent increase in salary of employees of BPS-1 to BPS-6, he said that he has also introduced a personal allowance in the next fiscal budget for employees of BPS-1 to BPS-6. “This relief has been provided to them in order to bring their monthly salary at the level of minimum wage Rs37,000 per month, as announced by the federal government,” he said that the proposed relief will help the existing staff serving in the non-gazetted category cope with the inflation.
For the employees from BS-7 to BS-16 there will be a raise of 25 percent and for the category of BS-17 and above there would be a 22 percent raise in salary, he said adding that a 15 percent increase in the pension of the retired employees has been proposed for the next fiscal year. The government proposed a minimum wage of Rs37000 for the labour a month for the next fiscal year keeping in view the surging inflation and rising cost of living.
The Current Capital Expenditure has been proposed at Rs184.8 billion against Rs136.256 billion in the current year, depicting an increase of 35 percent.
The budget estimates for investment activities have been proposed for Rs142.56 billion, including Rs73.4 billion earmarked for Sindh Pension fund and Rs65 billion reserved for the bridge financing of various PPP-led development projects through Viability Gap Fund. It shows a 61 percent increase over the budget of Rs.88.2 billion last year, he said.
For the next financial year, the government allocated Rs20 billion for a relief package for holy Ramzan. In order to cover the liabilities on account of pension and commutation, a provision of Rs260 billion has been kept for 2024-25.
The government has proposed an allocation of Rs25 billion over the next five years for provision of free rooftop solar home systems to 2.6 million off grid households. In the first phase in next fiscal year, solar home systems will be provided to 500,000 households. The systems will consist of 100 watt solar panel, 3 LED lights, a fan and six hours battery storage.
Copyright Business Recorder, 2024