KP govt hikes taxes on tobacco, property and traffic violations

PESHAWAR: The Khyber Pakhtunkhwa government presented the Finance Bill 2024 in the provincial assembly on Monday (today), proposing new taxes and adjustments to existing tax rates across multiple sectors.

The bill has proposed a one-time registration fee of Rs20,000 and an annual renewal fee of Rs15,000 for property and motor car dealers.

Significant changes have been proposed in the tobacco sector, with the development cess on tobacco per kilogram increasing from Rs6 to Rs50, on white leaf from Rs3 to Rs30 per kilogram, and on snuff from Rs2.5 to Rs7.50 per kilogram.

For wedding halls, the bill proposes a tax of Rs25,000 per event for Category A halls. Category B halls, with a capacity between 300 and 500, will be taxed Rs15,000 per event, while Category C halls in rural areas, with a capacity of less than 300, will be taxed Rs10,000 per event.

Additionally, new royalties have been set on minerals, including Rs75 per kilogram for tin and nephrite, and coal, nephrite, chromite, and graphite minerals have been brought under the tax net.

Property taxes will see changes as well. Houses under 5 marlas will not be taxed, but properties between 5 and 10 marlas will be taxed Rs3,500, those between 10 and 15 marlas will incur a tax of Rs4,000, one kanal properties will face a tax of Rs15,000, and two kanal properties will be taxed Rs40,000.

Also read: KP budget: Rs1,754bn outlay seeks up to 15% salary hike, tobacco tax

Private educational institutions will also be affected, with primary schools facing a tax of Rs40,000, middle schools Rs50,000, and high schools Rs100,000. A lifetime token tax of Rs2,500 has been proposed on motorcycles.

The bill also proposes 73 types of fines for traffic violations. The fine for motorcyclists for speeding will increase from Rs120 to Rs500, for motor vehicle speeding from Rs500 to Rs1,000, for violating traffic signals from Rs500 to Rs1,000, and for driving on the wrong side from Rs1,000 to Rs2,000. Opening a car door incorrectly will result in a fine of Rs500.

Furthermore, a 10 per cent tax will be imposed on the income doctors receive from the health card, and customs agents will face a fixed tax of Rs3,000.

The bill has asked companies purchasing tobacco from farmers to register with the excise department as part of the new regulations.

Sources said that the provincial government’s comprehensive approach aims to revenue generation through these proposed changes in the Finance Bill 2024.