KP to offer fixed and percentage-wise tax to service providers

PESHAWAR: The Khyber Pakhtunkhwa government will provide a parallel system of fixed and percentage-wise tax to the service providers to choose between the two regimes.

According to an official handout, Advisor to Chief Minister Khyber Pakhtunkhwa on Finance Muzzammil Aslam held a meeting with Director General Khyber Pakhtunkhwa Revenue Authority (KPRA) Fouzia Iqbal on Wednesday.

The DG KPRA briefed the minister on issues related to shifting of Sales Tax on services from percentage to fixed regime in various sectors including wedding halls and beauty parlors in the province.

It was proposed that a parallel system of fixed tax and percentage-wise tax would be provided to the service providers to choose between the two regimes.Those who violated the rules and resort to tax evasion will be subjected to heavy fines and would be shifted back to standard rates of the Sales Tax on services which is 15 percent.

The wedding hall and beauty parlors will be divided into different categories depending on their sizes and business volumes and rates of sales tax will be fixed for different categories.It was decided that traders’ associations and chamber of commerce would be taken on board and all the service providers would be compulsorily registered with KPRA.

The minister said that a rebate of 2 percent would be given to those who make payments on credit cards in restaurants and hotels registered as companies with KPRA in the 15 percent tax slabs.

“We are taking these steps to overcome the trust deficit and to facilitate our taxpayers and service providers,” the advisor said, adding the steps were aimed at documenting the economy and providing ease to the taxpayers and service providers.The advisor finance directed the KPRA team to include doctors and lawyers in the fixed tax category.

He said the government amending the KP Sales Tax Act 2022 and whistleblowers who point out any tax evasion would be given a certain percentage of the fine collected from the tax evaders.