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The Khyber Pakhtunkhwa government, in its Rs2.12 trillion budget for the next fiscal year, has set an ambitious target of collecting Rs182 billion in own tax and non-tax revenues. Total expenditures are projected at Rs2.17tr, leaving a deficit of Rs48bn.
For a resource-poor province like KP, which depends on federal transfers for around 90 per cent of its revenue, the aggressive push to expand own-source revenue is the only silver lining in an otherwise expenditure-heavy budget.
Budget documents show that provincial own receipts have been projected at Rs182.4bn for FY27, comprising Rs115.9bn in tax revenue and Rs66.5bn in non-tax revenue. Compared to the FY26 budget estimate of Rs129bn, this reflects a projected increase of 41.3pc, indicating efforts to strengthen domestic resource mobilisation and improve revenue administration, according to the finance department’s white paper.
Tax revenues have been budgeted at Rs115.9bn, up 38.8pc from last year’s estimate of Rs83.5bn and 32.6pc higher than revised estimates of Rs87.4bn. Within this, indirect taxes continue to dominate the structure, accounting for 91pc of total tax receipts, while direct taxes contribute just 9pc. Sales tax on services alone makes up nearly 47.8pc of total tax revenue, underlining its central role in provincial collections.
