Amidst financial challenges faced by the Punjab government, the interimprovincial cabinet has given the green light to a “Revenue MobilizationStrategy and Plan.” This plan spans three years, spanning from the currentfiscal year 2023/24 to 2025/26.
The Secretary of the Punjab Finance Department recently briefed theinterim cabinet, led by the interim Chief Minister of Punjab, Syed MohsinRaza Naqvi, regarding the province’s financial status.
As per official documents cabinet members were apprised that theprovincial government must provide essential services to its growingpopulation while simultaneously making vital public investments to bolstereconomic growth, productivity, and employment. To meet these obligations,the government must augment its available resources.
The Secretary explained that Punjab generates revenue in three primaryways:
1. Revenue share from the Federal Divisible Pool (FDP).
2. Revenue from Provincial Taxes.
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3. Revenue from Provincial Non-Tax Sources.
Furthermore, the cabinet was informed that in the fiscal year 2021-2022,Punjab collected taxes amounting to Rs286 billion, which represented 13.1percent of the province’s total revenue for that year (General RevenueReceipts) and 0.78 percent of the provincial Gross Domestic Product (GDP),estimated at 55% of Pakistan’s GDP.
The interim cabinet was also alerted to the need for the provincialgovernment to increase its revenues from provincial taxes, both in terms ofits total revenue and as a percentage of its GDP.
An official emphasized, “The government mustenhance its tax policy and administration to achieve higher growth inOwn-Source Tax Revenue (OSTR) relative to the growth in nominal GDP,thereby increasing the ratio of Own-Source Tax Revenue to GDP.”
