The Punjab government will establish a unified provincial revenue authority modeled on the Federal Board of Revenue (FBR) during the next fiscal year. This initiative aims to consolidate all provincial taxes under a single institutional framework as part of an ambitious reform agenda to enhance revenue collection and improve governance.
Finance Minister Announces Reform
Punjab Finance Minister Mian Mujtaba Shuja-ur-Rehman made the announcement at a post-budget press conference held at the Chief Minister's Office. He stated that the province achieved 99 percent of its revenue collection target in the outgoing fiscal year and consequently raised its revenue target for 2026-27 by 46 percent.
The minister expressed confidence in the government's reform program, emphasizing that the enhanced target would be achieved through improved administration, digitization, and expansion of the tax base, rather than through imposing new taxes. He noted that Punjab's own-source revenues are expected to grow by 30 to 40 percent.
No New Taxes Imposed
Under the leadership of Chief Minister Maryam Nawaz Sharif, the provincial government has neither imposed new taxes nor increased existing tax rates over the past two years. Instead, substantial gains in revenue collection have resulted from curbing corruption and improving tax administration.
The Punjab Revenue Authority (PRA) surpassed its collection target for the current fiscal year by collecting 30 percent more revenue than projected. The Excise and Taxation Department recorded a 12 percent increase in collections. Among non-tax revenue entities, the Mines and Minerals Department emerged as the leading contributor.
Revenue Targets for Next Fiscal Year
For the next fiscal year, the PRA has been assigned a revenue target of Rs528 billion, while the Excise and Taxation Department will collect Rs124 billion. Non-tax revenue departments have a cumulative target of Rs461 billion.
Responding to questions about proposed tax revisions, the finance minister said only limited adjustments were made to some existing levies due to economic conditions, noting that many had remained unchanged for decades.
Contribution to Federation
A key factor behind the adjustments was Punjab's decision to contribute Rs546 billion to the federation, reducing the Annual Development Programme (ADP) from Rs1.24 trillion to Rs752 billion. The chief minister made this decision in the larger national interest, reflecting that a strong federation depends on strong provinces.
Despite the reduction in development resources, the government has not compromised on its development agenda or public service delivery. The fiscal gap will be managed through expenditure rationalization and measures to stimulate economic activity.
Agricultural Taxation and Digitization
The proposed amendments to agricultural taxation will affect only landholdings exceeding 12.5 acres, with rates unchanged since 1998. Following successful digitization of revenue collection under the Excise and Taxation Department, the Board of Revenue's collection system will also go online. The property tax regime is being fully digitized to enhance transparency and eliminate corruption opportunities.
Expanding Revenue Authority
The government is expanding the operational scope of the Punjab Revenue Authority and strengthening its human resource capacity to support the unified revenue structure. These reforms aim to improve governance, increase institutional efficiency, and ensure greater transparency across the provincial revenue system.
Concluding his address, Mian Mujtaba Shuja-ur-Rehman claimed that Punjab's achievements in tax reforms and revenue mobilization over the past two years surpassed the previous decade's performance. He said Punjab has moved ahead of the federation and other provinces in revenue management and development implementation. "The strongest proof of our performance is that work has commenced on all development projects announced in the last two provincial budgets," he said, describing it as an unprecedented achievement in Punjab's history.
