Khyber Pakhtunkhwa has an overwhelming fiscal dependence on federal transfers that it receives in the form of shares from the federal divisible pool and through straight transfers. The Provincial Own Source Revenue (OSR) has a narrow base, nevertheless not professionally fathomed. The 18th constitutional amendment provided an opportunity in shape of transfer of the Sales Tax on Services to the provinces. Keeping in view the reform agenda of our Government, the province tax regime was expanded through enactment of Khyber Pakhtunkhwa Finance Act, 2013, and establishment of Khyber Pakhtunkhwa Revenue Authority (KPRA) there under in the very first year of the Government.
KPRA is thus the focus of our tax reforms to explore and tap the potential of revenue generation for the province. The transition team headed by Director General KPRA is performing up to our expectations, which is very much apparent through recent institutional development efforts, resulting in establishing sustainable and vibrant organization, fully equipped for tax administration in the province. More effective OSR mobilization will give the province fiscal space to expand provision of public services. Given the present pace and mode of cross cutting institutional reforms including tax facilitation drive and public awareness, I hope that fully functional and capable KPRA will play a key role in raising Khyber Pakhtunkhwa as a prosperous and developed province.