LPE: Taxation for growth in KP: A focus on sales tax on services

The Consortium for Development Policy Research (CDPR) in partnership with International Growth Center (IGC) and Sustainable Energy and Economic Development (SEED) organized a set of two webinar sessions to discuss ways of maximising provincial fiscal space by focusing on two specific taxes: sales tax on services and the urban property tax.

The first session entitled, "Taxation for growth in KP: A focus on sales tax on services" was held on Thursday, July 9 from 6:00pm to 7.45pm (PST). This webinar brought together senior policy makers, academics and practitioners to highlight international best practices, cross-country learnings and domestic experiences in Pakistan's provinces of Khyber Pakhtunkhwa and Punjab towards seeking a better understanding of sales tax on services, addressing the implementation challenges, and ensuring that tax policy is supporting the growth agenda in Khyber Pakhtunkhwa.

The following eminent panelists shed light on the various aspects of this discussion as outlined below:

1) Mr. Taimur Jhagra (Finance Minister, Govt of KP) - (Opening Remarks) - discussed the role of provincial taxes in the overall growth agenda for Khyber Pakhtunkhwa and how the recent budget reflects the government's priorities regarding improving the performance of the sales tax on services and reforms needed in this area.

2) Mr. Hasaan Khawar (Team Lead, DFID-funded SEED) - outlined the ways in which the DFID-funded SEED program is supporting tax reform in Pakistan, its importance for generating revenue while highlighting the stakeholders they are working with, as well as set the context for the rest of the discussion.

3) Dr. Mazhar Waseem (Public Finance Economist, University of Manchester) - described the structure and design of sales tax on service, highlighting its key weaknesses and suggesting interventions in design and governance to improve outcomes.

4) Dr. Michael Best (Professor of Economics, Columbia University) - highlighted developing-country experiences with sales tax on services, drew upon international best practices and solutions for its correct implementation.

5) Mr. Javed Ahmad (Tax Economist, Punjab Revenue Authority) - referred to Punjab’s experience with implementing the sales tax on services and setting up the Punjab Revenue Authority in Punjab and key lessons for future reforms.

6) Ms. Annabel Gerry (Head of DFID Pakistan) - Concluding Remarks.