1

A. F. FERGUSON & CO. Provincial Budget 2014

a member firm of the PwC network Khyber Pakhtunkhwa









A. F. FERGUSON & CO.


PROVINCIAL BUDGET 2014
KHYBER PAKHTUNKHWA


This Memorandum summarises salient features of the provincial budget and the Finance Bill
presented in the Khyber Pakhtunkhwa assembly. Under the Constitution, taxing rights on
rendering of services, disposal and use of immovable properties and agricultural income tax
inter alia are with the provinces. All changes proposed through the Provincial Bill are effective
July 1, 2014 subject to approval by the provincial assembly.

Major receipts of the province are from sales tax on rendering of services. Stamp duties,
registration fees, property tax and agricultural income tax also inter alia fall within the ambit of
provincial fiscal legislation.

The proposals in the Provincial Bill are to be approved by the assembly and should not generally
be acted upon without obtaining appropriate advice.

This Memorandum can also be accessed on our website www.pwc.com/pk



June 19, 2014







2


A. F. FERGUSON & CO. Provincial Budget 2014
a member firm of the PwC network Khyber Pakhtunkhwa


















Page Number



Sales Tax on Services 3

Land tax and Agricultural income tax 3

Stamp duty 4

Property tax 4

Shops and establishments 4

Tobacco Cess 4

Professional tax 5

Tax on capital value of immoveable property 6



CONTENTS
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A. F. FERGUSON & CO. Provincial Budget 2014
a member firm of the PwC network Khyber Pakhtunkhwa






SALES TAX ON SERVICES

Scope of Taxable Services Extended

Amendment in kinds of services in the existing
entries of the First Schedule:

Advertisement
o Sale of space for advertisement
o TV, Radio & Production services
o Broadcasting services

Scope of contracting services enhanced to
cover all building, electro-mechanical, turn-
key projects excluding individual house
construction contracts

Cosmetic and plastic surgery

Video tape and production services

Copy right services

Sound record services

Services of workshops, mechanic shops, air
conditioning fittings service and cleaning
centers

Container terminal services

Manpower recruitment and labour supply
services

Port operating services

Public bonded warehouse

Services provided in respect of mining of
minerals, oil and gas including related
surveys and allied activities

Event management services

Corresponding amendments to Second
Schedule, wherein the applicable tax rates are
stated, are proposed to be made through
notifications as per the speech of the Provincial
Minister in-charge.



LAND TAX AND AGRICULTURAL
INCOME TAX

Scope of definition of owner has been
enhanced to include any person who is in
possession of Government or private land

Rates of tax on owners of cultivated land

Existing Proposed
Rs per
acre
Rs per
acre
Cultivated land
- exceeding 5 acres but
not exceeding 12.5
acres


72


225

- exceeding 12.5 acres 100 340

Orchard 300 900

Slabs and rates of tax on Agricultural income

Proposed
Where agricultural
income

- is upto Rs 400,000 Nil

- exceeds Rs 400,000
but does not exceed Rs
550,000
5% of amount
exceeding Rs
400,000

- exceeds Rs 550,000
but does not exceed Rs
750,000
Rs 7,500 + 7.5% of
amount exceeding
Rs 550,000

- exceeds Rs 750,000
but does not exceed Rs
950,000
Rs 22,500 + 10% of
amount exceeding
Rs 550,000

- exceeds Rs 950,000
but does not exceed Rs
1,100,000
Rs 42,500 + 15% of
amount exceeding
Rs 950,000

- exceeds Rs 1,100,000 Rs 65,000 + 17.5%
of amount exceeding
Rs 1,100,000





3%
KHYBER PAKHTUNKHWA FINANCE BILL 2014

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A. F. FERGUSON & CO. Provincial Budget 2014
a member firm of the PwC network Khyber Pakhtunkhwa


STAMP DUTY
Stamp duty on following instruments is
proposed to be enhanced
Existing Proposed
Rs Rs
Affidavit 30 60

Allotment order or
transfer thereof

- Residential (per
marla)

100

200
- Commercial (per
marla)

200

400

Arms license of
prohibited bore

150

1,000

License for arms and
parts thereof to
manufacture, sell or
kept for sale



1,500



2,500

Award - directing
partition (per Kanal
or part thereof)


Nil


50

Power of attorney
- For registration of
documents in
relation to a single
transaction



200



300
- For authorizing
person(s) to act in
a single
transaction not
specified otherwise




250




300
- For authorizing
not more than 5
persons to act in a
single transaction
not specified
otherwise





750





900
- when given for
consideration to
sell immoveable
property in case of
legal heirs




Rs 1,000




Deleted




PROPERTY TAX

Existing property tax rates have been enhanced.
Further, the following are proposed to be taxed
Rs per
annum
Service stations of vehicles 10,000

Buildings and lands used for
erection of Mobile phone towers

- Provincial Headquarter 40,000
- Divisional Headquarter and
respective sub-urban areas

30,000
- District Headquarter and
respective sub-urban areas

20,000

SHOPS & ESTABLISMENTS

Upward revision in rates for registration and
annual renewal for shops and establishments are
proposed as follows
Existing Proposed
Rs Rs
Registration having
workers less than

- 5 75 200
- 10 100 500
- 20 125 1,000
- others 150 2,000

Annual renewal of
registration having
workers less than

- 5 25 200
- 10 50 500
- 20 75 1,000
- others 100 2,000

TOBACCO CESS

Upward revision in tobacco cess
Existing Proposed
Rs per Kg Rs per Kg
Virginia (flu cured,
barley and dark air
cured)
2.5 5
White patta / rustica
tobacco
1.25 2.50
Sunff/naswar 1 2

5


A. F. FERGUSON & CO. Provincial Budget 2014
a member firm of the PwC network Khyber Pakhtunkhwa


PROFESSIONAL TAX

Professional tax is proposed as per below

Existing
Rs Per
annum
Proposed
Rs Per
annum
All persons engaged in
any profession, trade,
calling or employment
other than specified,
having income or
earning

- exceeds Rs 6,000 but
does not exceed Rs
10,000


140


Exempted
- exceeds Rs 10,000
but does not exceed
Rs 20,000


220


330
- exceeds Rs 20,000
but does not exceed
Rs 50,000


290


435
- exceeds Rs 50,000
but does not exceed
Rs 100,000


290


600
- exceeds Rs 100,000
but does not exceed
Rs 200,000


290


800
- exceeds Rs 200,000
but does not exceed
Rs 500,000


290


1,000

Government employees
- BS 01 to 04 Exempted Exempted
- BS 05 to 12 Exempted 100
- BS 13 to 16 Exempted 200
- BS 17 120 300
- BS 18 180 500
- BS 19 240 1,000
- BS 20 and above 360 2,000











Existing
Rs Per
annum
Proposed
Rs Per
annum
Companies,
Modarabas, Mutual
Funds and other body
corporate with paid up
capital and reserves in
the preceding year

- not exceeding Rs 10
million

12,000

10,000
- exceeding Rs 10
million but not
exceeding Rs 25
million



18,000



27,000
- exceeding Rs 25
million but not
exceeding Rs 50
million



24,000



36,000
- exceeding Rs 50
million but not
exceeding Rs 100
million



60,000



90,000
- exceeding Rs 100
million but not
exceeding Rs 200
million



90,000



100,000
- exceeding Rs 200
million

100,000

100,000

Persons other than
companies

- commercial
establishments /
factories having 10 or
more employees



2,400



10,000
- private clinics /
hospitals
3,600 to
12,000
10,000 to
100,000
- private educational
institutions
1,500 to
100,000
5,000 to
100,000

Import and export
license holders
2,400 /
3,600
4,000 /
5,000

Clearing agents 1,800 10,000

Travel agents 6,000/
9,000
8,000 /
15,000





6


A. F. FERGUSON & CO. Provincial Budget 2014
a member firm of the PwC network Khyber Pakhtunkhwa




Existing
Rs Per
annum
Proposed
Rs Per
annum

Guest houses /
restaurants / Caterers

12,000

15,000

Advertisement
agencies

6,000

10,000

Doctors 1,200 /
3,600
2,000 /
15,000/
20,000

Diagnostic and
Therapeutic centers
2,400 /
12,000
3,600 /
15,000

Contractors, suppliers
and consultants to
Government and local
authorities


3,600 to
100,000


4,000 to
100,000

Petroleum filling
stations

6,000

8,000

All other
establishments

2,400

3,000

Chartered Accountants
in practice


12,000


15,000

Vehicle service stations
Nil

5,000

Transporters /
Transport companies

Nil
3,000 /
2,000

Member stock
exchange

Nil

5,000

Money changer Nil 5,000 /
10,000

Health fitness centers
Nil
1,000 /
2,000

Jewelers/Departmental
/ Electronic goods
stores / Cable
operators / Printing
press / Pesticides
dealers




Nil




Rs 1,000

Tobacco whole seller Nil Rs 2,000


TAX ON CAPITAL VALUE OF
IMMOVEABLE PROPERTY

Minimum tax rates are proposed to be reduced
from Rs 10 for certain floors of commercial
properties. Proposed rates are as follows

Proposed

Where the value of the
immoveable property
is recorded
2% of the recorded
value of the property
provided the amount
of tax per sq-ft of
constructed area for
floor indicated
below shall not be
less than:
Rs 8 per sq-ft for
basement / First
floor
Rs 10 per sq-ft for
ground floor
Rs 7.5 per sq-ft for
2
nd
floor
Rs 7 per sq-ft for 3
rd

floor and above.

Where the value of
immoveable property
is not recorded
The amount of tax
per sq-ft of
constructed area for
floor indicated
below shall be:
Rs 8 per sq-ft for
basement / First
floor
Rs 10 per sq-ft for
ground floor
Rs 7.5 per sq-ft for
2
nd
floor
Rs 7 per sq-ft for 3
rd

floor and above.