The Khyber Pakhtunkhwa (KP) Excise, Taxation and Narcotics Control Department has officially released its revised professional tax rates for the upcoming fiscal year 2025-26, as detailed in the provincial budget documents. The updated tax scheme introduces a mixed bag of adjustments, featuring both increases and decreases across various professions, businesses, and employment sectors.
These changes are set to come into effect from July 1, 2025, as part of the provincial government’s broader fiscal reforms aimed at restructuring and optimizing revenue collection.
Key Changes in Professional Tax Rates:
Exemptions and Relief:
- Low-Income Earners: In a significant relief measure, individuals earning between Rs. 20,000 and Rs. 36,000 per month, who previously paid Rs. 1,000 annually, are now exempted from the professional tax.
- Medical Professionals (Specialists): Specialist doctors practicing in Peshawar will see their annual tax halved from Rs. 80,000 to Rs. 40,000. Those operating in divisional headquarters will pay Rs. 35,000, down from Rs. 60,000.
- Non-Specialist Doctors: Non-specialist doctors, including Hakims, homeopaths, and dentists, will also benefit from reduced tax rates, signaling a move to ease the burden on a broader range of medical practitioners.
- Chemists and Medical Stores: The tax for chemists and medical stores has been reduced from Rs. 20,000 to Rs. 15,000.
Increases in Tax Rates:
- Commercial Establishments & Factories: Commercial establishments and factories employing 10 or more workers will now pay Rs. 20,000 annually, an increase from the previous Rs. 15,000.
- Private Clinics and Hospitals (Small): Private clinics and hospitals with up to 10 employees will also see their annual tax increase from Rs 15,000 to Rs. 20,000.
- Private Hospitals (Large): Larger private hospitals with 10 to 50 employees will now pay Rs. 80,000 annually, up from the previous Rs. 60,000.
- Government Contractors: Contractors providing goods or services to government institutions will face a higher tax. For contracts ranging from Rs. 10,000 to Rs. 500,000, the annual tax has doubled to Rs. 10,000.
- Marriage Halls and Event Lawns: Taxes for these venues have been increased from Rs. 60,000 to Rs. 70,000.
- Gyms and Fitness Centers: Gyms and fitness centers in provincial headquarters will see a substantial increase, with their tax raised from Rs 3,000 to Rs. 10,000.
- Electronics Stores: Electronics stores will now pay Rs. 20,000 instead of Rs. 10,000.
These revised rates reflect the KP government’s strategic approach to rationalize its revenue collection, providing relief to certain segments while increasing the contribution from others to meet its fiscal objectives for the upcoming year.
