Khyber-Pakhtunkhwa Revenue

Authority (KPRA)

BY: ATEEQ ULLAH

 History

 Sale tax on Services introduced in the year 2000 in the provinces .

 Islamabad Capital territory (tax on services 2001)
 After 18th Constitutional Amendments 2010 transfer the sale tax on
service to the provinces.
 In 2011 Sindh (SRA) sales tax on services legislated.
 Punjab (PRA) enacted it in 2012.
 KP introduced Levy of Sale Tax on services through KP Finance Act 2013
 Established KPRA
 The Authority has generated total revenue of Rs. 42 billion since its
inception.
 Balochistan Revenue Authority (BRA) established in 2015
 Introduction of KPRA

 The authority as corporate entity was established under the Khyber

Pakhtunkhwa Finance Act, 2013, with the mandate to administer
and collect Sales Tax on Services. The KPRA is governed, with
relative autonomy, and placed under the Excise & Taxation
Department to have an interface with the provincial government.
 Initially eleven (11) service sectors were included in Schedule-II of
the Khyber Pakhtunkhwa Finance Act 2013 and during the period
from 2013-14 to 2016-17, the tax base has been broadened by
adding more sectors. The total taxable sectors in the year 2017-18
reached to ninety one (91).
Continued…..

 On August 6, 2013, the authority started its journey by registering

seven (07) persons which number raise to three hundred and eight
(308) at the end of June, 2014 and by December 2017, 1160
registered taxpayers have regularly filed their monthly returns.
 KPRA is mandated for imposition, levy, collection and administration
of tax on services provided, supplied, rendered, initiated, originated,
executed, received, delivered or consumed in the Province of the
Khyber Pakhtunkhwa
Continued….

 The Authority shall comprise of a Director General and not less than
three Directors to be appointed by the Government
 The Authority shall meet at least once in a month but the Director
General may, at any time, call a special meeting of the Authority
 Rate of Sales Tax on Services is 15% except telecommunication
whereon it is 19.5% on the "value of taxable services".
 Organization Structure (council)
The council is a policy making body
DG KPRA acted as a secretary of the Council
The Council shall meet at least once every six month

Chief Minister

Secretaries of
Excise & Taxation Chief Secretary Finance, Law, 4 Members from
Finance Minister Law Minister DG of Authority
Minister KP Excise & Taxation, Private Sector
department
 Audit

 The Auditor General of Pakistan shall annually audit the accounts of

the Authority.

 The Authority, in addition to the audit under sub-section (1), shall

also cause the annual accounts of the Authority audited, in the
prescribed manner, by a Chartered Accountant or a firm of
Chartered Accountants.
Performance Overview of KPRA

 In the first year, the authority was able to collect Rs 6.02 billion
against the target of Rs 6.00 billion. During the next financial year i.e.
2014-15 the target was raised to Rs.12 billion (100% increase) without
any empirical evidence and altogether ignoring the capacity of the
nascent organization. Resultantly, the nascent organization
managed only collected Rs 6.2 billion. Again, in the financial year
2015-16, a target of Rs.14 billion was fixed. However, the target was
revised to Rs.8.00 billion against which a total collection of Rs.7.2
billion could be managed.
 For the year 2016-17, the provincial government set the target of
Rs.10 billion, which represented an increase of 25% over the previous
year’s target and the authority succeeded in collecting revenue of
Rs.10.27billion, which also include Rs.1.4billion as recovery from a
court case.
Continued….

 For the Year 2017-18 the target was Rs 14 Billions but Actual amount
collected is RS 12 Billions.

Years Expected Revenue Actual Collection

In Billions (RS) In Billions (Rs)
2013-14 6 6.02
2014-15 12 6.2
2015-16 14 (8) 7.2
2016-17 10 10.27
2017-18 14 12
 KPRA vs FBR

 Pre-2013, FBR collected taxes on services and distributed among the

provinces accordingly
 Post 2013, the tax collection on services has experienced a steady
growth. KPRA collected Rs. 42 billion in just Five (05) years.
 In comparison with overall tax collection of Rs. 22.8 billion made by
FBR during twelve (12) years i.e. 2001 to 2013.
 The increase in revenue collection by KPRA justifies the decision of
transferring the sales tax on services collection to the provinces.
Majors Sectors Contribution
Actual Figures