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Khyber Pakhtunkhwa assembly tables surplus budget for FY2024-25

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The Khyber Pakhtunkhwa Assembly has announced the fiscal year 2024-25 budget, revealing a surplus of Rs 100 billion. The budget meeting, chaired by Speaker Babar Saleem Swati, commenced 2 hours and 15 minutes behind schedule. Finance Minister Aftab Alam presented the budget, and Chief Minister KP Ali Amin Gandapur was in attendance. The total revenue for the province is estimated at Rs 1754 billion, while the total expenditure is Rs 1654 billion.

Salary and Pension Increases

Government employees will see a 10% increase in basic salaries, along with a corresponding 10% rise in monthly pensions. Additionally, the minimum monthly wage is set to rise from Rs 32,000 to Rs 36,000, aimed at improving the livelihoods of workers across the province.

Investments in Education and Healthcare

Education remains a key priority, with Rs 362 billion 68 crore allocated for the sector, marking a 13% increase from the previous year. Higher education will receive Rs 35 billion 82 crores, while plans are underway to establish 30-degree colleges in rented buildings. In a move to enhance healthcare accessibility, Rs 34 billion has been earmarked for the healthcare program, ensuring broader coverage for medical expenses.

Revenue Allocation and NFC Award

Finance Minister Aftab Alam highlighted the province’s fiscal challenges, citing an annual deficit of Rs 139 billion due to discrepancies in the National Finance Commission (NFC) award distribution. Despite an allocated share of Rs 262 billion, KP has only received Rs 123 billion, exacerbating financial strains.

Hydropower Revenue and Taxation

Significant revenue from hydropower, totalling Rs 78 billion 21 crores, underscores the province’s potential for energy generation. Meanwhile, efforts to bolster revenue streams include initiatives such as oil and gas royalties, windfall levies, and measures to address tax arrears.

Tax Reductions for Hotels and Marriage Halls

Minister Alam announced a significant reduction in the sales tax rate for hotels, which has been lowered to 6%. Additionally, he mandated the use of a restaurant invoice management system for all hotels. Furthermore, a fixed sales tax rate is proposed for marriage halls to streamline taxation in the hospitality sector.

Property Tax Relief

The finance minister proposed reducing property tax rates to alleviate the tax burden on property owners. The current property tax on factories, set at Rs 2.5 per square foot or Rs 10,600 per kanal, is slated to be decreased to Rs 10,000 per kanal, providing relief to industrial enterprises.

Healthcare Allocation

A total of Rs 232.80 billion has been designated for the health sector, marking a 13% increase in health expenditure compared to the previous year. Key highlights of the health budget include the introduction of an air ambulance service and the establishment of a satellite centre for the Peshawar Institute of Cardiology in the southern districts. Additionally, new medical and dental colleges will be developed with participation from the private sector.

The budget reflects KP’s commitment to fostering economic growth, improving public services, and addressing fiscal challenges to ensure sustainable development across the province.

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