Sales Tax on Services (STS) Roadmap

Sales Tax on Services (STS)
Roadmap

KPRA is now aiming to increase revenue at an average annual rate of 25% for the next three years.

Sales Tax on Services

Overview

Provincial revenue receipts are substantially dependent on federal transfers. Within the provincial own source revenue, STS contributes the largest share and ever since 2013, when collection of STS was taken over by the province, STS’s share in provincial tax receipts has increased from 28% in FY 2014 to 33% in FY 2021. Amongst the provincial own tax revenues, STS contributes about 55%. Khyber Pakhtunkhwa Revenue Authority (KPRA), which is responsible for the collection and administration of sales tax on services, has made efforts in recent years to increase revenue through STS. Through a combination of legislation, collection and recovery, KPRA has doubled STS revenue in two years from Rs. 10.3 billion in FY 2018-19 to Rs. 20.8 billion in FY 2020-21.

The roadmap

Progress

Since March 2021, SEED is assisting KPRA in implementing a Sales Tax on Services Roadmap to chart out and implement a robust plan to achieve ambitious revenue targets.

Overseen by the KP Finance Minister

The STS Roadmap

The STS Roadmap is overseen by the KP Finance Minister, who chairs the monthly stocktakes and insights presented lead to further actions. The mechanism serves to unlock problem areas, resolve issues, and maintain accountability.

SEED

PROVIDING TECHNICAL ASSISTANCE TO KPRA

Alongside the Roadmap, SEED is also providing multiple TA support to KPRA (visit website) in form of; simplification of E-registration and E-filing procedures, website revamp, delivery labs, communication strategy and establishment survey.