Punjab plans to increase its development spending by cutting taxes and implementing an economic provocation to facilitate small businesses in its budget for the fiscal year 2020-21. It has done so to alleviate the deadly impacts of the coronavirus pandemic and for creating jobs in the province.
According to officials, the government is planning to target public development investment of Rs 337bn, up by nearly 9.5 pc from the original estimates for the present year despite a major reduction in its share from the federal divisible tax pool and provincial tax and non-tax revenues because of the economic recession spawned by the Covid-19 outbreak.
Divisible pool provincial share is expected to be Rs 1,439bn or over 10pc less than the original estimates of Rs 1,611bn for the current financial year. Alike, provincial tax and non-tax revenue target by approximately a fifth to Rs 318bn has been cut by the provincial government.
A senior provincial government official said, “The economic situation remains fluid in Punjab as well as in the rest of Pakistan because of increasing coronavirus infections and the businesses are feared to continue to reel under the impact of the outbreak for a few months to come. Therefore, we have decided to cut provincial taxes on small businesses in addition to stimulating their growth through Rs 30bn development stimulus to save jobs,”
The systematic budget framework will let the government keep monitoring the effects of the virus pandemic on the provincial economy on a monthly basis, also, to change its strategies and policies to protect businesses and jobs accordingly.
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