Finance Act, 2010

THE KHYBER PAKHTUNKHWA
FINANCE ACT, 2010.
(KHYBER PAKHTUNKHWA ACT NO. VIII OF 2010)
CONTENTS
PREAMBLE
SECTIONS
1. Short title, extent and commencement.

2. Levy of tax on capital value of immovable property.
3. Amendment of 1[Khyber Pakhtunkhwa] Ord. No. III of 2000.
SCHEDULE
1
Substituted vide Khyber Pakhtunkhwa Act No. IV of 2011
THE KHYBER PAKHTUNKHWA
FINANCE ACT, 2010.
(KHYBER PAKHTUNKHWA ACT NO. VIII OF 2010)
[First published after having received the assent of the Governor of the Khyber
Pakhtunkhwa in the Gazette of Khyber Pakhtunkhwa (Extraordinary),dated the 5th
July, 2010]
AN
ACT
to continue, levy and revise certain taxes in the
Province of the Khyber Pakhtunkhwa.
Preamble.---WHEREAS it is expedient to continue, levy and revise certain

taxes in the Province of the Khyber Pakhtunkhwa and for matters ancillary
thereto or connected therewith;
It is hereby enacted as follows:
1. Short title, extent and commencement.---(1) This Act may be called

the Khyber Pakhtunkhwa Finance Act, 2010.
(2) It shall extend to the Province of the Khyber Pakhtunkhwa.
(3) It shall come into force on the 1st day of July, 2010.
2. Levy of tax on capital value of immovable property.---(1) A tax on the

capital value of immovable property, to be called the capital value tax, shall be
payable by every individual, association of persons, firm or a company, which
acquires by purchase, gift, exchange, surrender, power of attorney other than
revocable and time-bound (not exceeding sixty days) executed between spouses,
father and son or daughter, grand parents and grand children, brother and sister or
relinquishment of rights by the owner (whether effected orally or by deed or obtained
through Court decree), except by inheritance or gift from spouse, parents, grand
parents, a brother and a sister of an immovable property or a right to the use thereof
for more than twenty years, or renewal of the lease or any premium paid thereon, at
the rates specified in sub-section (2).
2
[(2) The rates of tax in respect of immovable properties are as under:
(a) Immovable property other than commercial property,

industrial property and residential flats situated in urban areas
2
Substituted vide Khyber Pakhtunkhwa Act No. XIII of 2011
measuring at least 500 square yards or one kanal (whichever is
less) and more,-
No. Description of Rate of tax

Immovable property.
(i) Where the value of the Two percent of the

immovable property is recorded value of the
recorded. landed area.
(ii) Where the value of the Twenty five rupees

immovable property is per square foot of the
not recorded. landed area.
(iii) Where the immoveable Ten rupees per square

property is a foot of the
constructed property. constructed area in
addition to the value
worked out above.
(b) Immovable Commercial and Industrial property of any size

situated in an urban area,-

Immovable property.
(i) Where the value of the Two percent of the

immovable property is recorded value of the
recorded. landed area.
(ii) Where the value of the Twenty five rupees

immovable property is per square foot of the
not recorded. landed area.
(iii) Where the immoveable Ten rupees per square

property is a foot of the
constructed property. constructed area in
addition to the value
worked out above.
3
[(c) Commercial immoveable property including residential flats
situated in Plazas or Multi-story buildings of any size situated
in an urban area:

property.
(i) Where the value 2% of the recorded value of the

of the immovable immovable property provided that
property is the amount of tax per Sq-ft of
recorded. constructed area for floor indicated
below shall not be less than:
Rs. 8/ per Sq-ft for basement

Rs. 10/ per Sq-ft for ground floor
Rs. 8/ per Sq-ft for 1st floor
Rs. 7.5/ per Sq-ft for 2nd floor
Rs. 7/ per Sq-ft for 3rd floor and
above.
(ii) Where the value The amount of tax per Sq-ft of

of the immovable constructed area for floor indicated
property is not below shall be:
recorded.
Rs. 8/ per Sq-ft for basement
Rs. 10/ per Sq-ft for ground floor
Rs. 8/ per Sq-ft for 1st floor
Rs. 7.5/ per Sq-ft for 2nd floor
Rs. 7/ per Sq-ft for 3rd floor and
above.]]
(3) For the purposes of sub-section (1), the capital value of the
immovable property shall be the value as specified in the Standard Valuation Tables
of Immovable Properties or the values specified by the District Collector for the
purposes of Stamp Duty or, which such value has not been determined, the value
declared by the transferee:
Provided that in case the property is let out, its value shall be adopted at ten
times the sum for which it might reasonable be expected to be let out from year to
year.
3
Substituted vide Khyber Pakhtunkhwa Act No. XXV of 2014
(4) The capital value tax shall be collected by the person responsible for
registering or attesting the transfer of the immovable property in respect of which the
tax is payable, at the time of registering or attesting the transfer.
(5) The proceeds of the tax collected under sub-section (4) shall be
credited to the Provincial Consolidated Fund under the head specified by the
Provincial Government.
(6) Where the capital value tax is not collected from the person liable to
pay it, the tax may be collected by an officer designated by the Revenue Department
Khyber Pakhtunkhwa, in this behalf from the said person at any subsequent time. In
case of any default or non-payment, the amount of unpaid capital value tax may, in
addition to any other mode of recovery, as prescribed by rules made under sub-
section (9) of this section, may also be recovered as arrears of land revenue.
(7) Where any person willfully fails to collect or having collected

willfully fails to pay the capital value tax as required, he shall be personally liable to
pay the tax alongwith additional tax at the rate of 15% per annum for the period for
which such tax or part thereof remains unpaid.
(8) The Provincial Government, on an application by the assessee, from

whom the tax is sought to be recovered, may revise any order made under this
section.
(9) The Revenue Department, Khyber Pakhtunkhwa may, by notification

in the official Gazette, make rules relating to the collection and recovery thereof, or
any other matter relating to the capital value tax.
(10) The Provincial Government may, by notification in the official

Gazette, exempt, any person or class of persons or immovable property or class of
immovable property from the capital value tax:
Provided that such exemption may be subject to such conditions as may be

specified in the notification.
Explanation.---For the purposes of this section, the expressions-
(a) “Association of persons”, “Company” and “firm” shall have

the same meaning as contained in the Income Tax Ordinance,
2001 (Ordinance No. XLIX of 2001);
(b) “development authority” means an authority formed by or

under any law for the purposes of development of an area and
includes any authority, society, agency, trust, association or
institution declared as development authority by the Revenue
Department by a notification in the official Gazette;
4
[(bb) “recorded value” means the value declared by the transferee in
the instrument provided that the declared value of landed area
shall not be less than that specified in the valuation table
notified by the District Collector;]
(c) “registration authority” means the person responsible for

registering or attesting the transfer of the immovable property
or of the right to use thereof for more than twenty years, and
in the case of a development authority or a co-operative
society, its principal officer; and
(a) “urban area” means the rating areas as defined under the West
Pakistan Urban Immovable Property Tax Act, 1958 (W.P. Act
No. V of 1958).
3. Amendment of 5[Khyber Pakhtunkhwa] Ord. No. III of 2000.---In the

6
[Khyber Pakhtunkhwa] Sales Tax Ordinance 2000 (7[Khyber Pakhtunkhwa] Ord.
No. III of 2000), the following amendments shall be made, namely,-
(i) in section 3, in sub-section (1), for the words “sixteen per cent”, the
words “seventeen per cent” shall be substituted; and
(ii) for the existing Schedule, the following shall be substituted, namely:
“SCHEDULE
[see section 3(2)]
1. Services provided or rendered by hotels, marriage halls, lawns, clubs and

caterers.
2. Advertisement on T.V. and Radio, excluding advertisement-
(i) if sponsored by a Government Agency for health education;
(ii) financed out of funds provided under grant-in-aid agreement; and
(iii) conveying public service messages, if telecast on television by the

World Wildlife Funds for Nature of UNICEF.
4
Inserted vide Khyber Pakhtunkhwa Act No. XIII of 2011
5
6
7
3. Services provided or rendered by persons authorized to transact business on
behalf of others-
(i) customs agents;
(ii) ship chandlers; and
(iii) stevedores.
4. Courier services.
5. Services provided or rendered for personal care by beauty parlors, beauty

clinics, slimming clinics.
6. Services provided and rendered buy laundries and dry cleaners.
7. Advertisement on Close Circuit TV or Cable TV.
8. Shipping agents.
9. Telecommunications Services:
(i) Telephone services
(ii) Fixed line voice telephone service
(iii) Wireless telephone
(iv) Cellular telephone
(v) Wireless local loop telephone
(vi) Video telephone
(vii) Payphone cards
(viii) Pre-paid calling cards
(ix) Voice mail service
(x) Messaging service
(xi) Short Message service (SMS)
(xii) Multimedia message service (MMS)

(xiii) Bandwidth services [used for voice and video telecommunication
service]:
(a) Copper line based
(b) Fiber-optic based
(c) Co-axial cable based
(d) Microwave based
(e) Satellite based
(xiv) Voice over I.P. services
(xv) Teleconferencing services
(xvi) Telegraph
(xvii) Telex
(xviii) Telefax
(xix) Store and forward tax services
(xx) Audiotext services
(xxi) Teletext services
(xxii) Trunk radio services
(xxiii) Internet services
(xxiv) Paging services
(xxv) Voice paging services
(xxvi) Radio paging services
(xxvii) Vehicle tracking services
(xxviii) Bruglar alarm services
10. Services provided or rendered in respect of insurance to a policy holder by an

insurer, including a re-insurer:
(i) Goods insurance
(ii) Fire insurance
(iii) Theft insurance
(iv) Marine insurance
(v) Other insurance.
11. Services provided by banking companies or non-banking financial

institutions including but not limited to all non-interest based services
provide or rendered against a consideration in form of a fee or commission or
charges.

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THE KHYBER PAKHTUNKHWA

FINANCE ACT, 2010.

(KHYBER PAKHTUNKHWA ACT NO. VIII OF 2010)

1. Short title, extent and commencement.

(KHYBER PAKHTUNKHWA ACT NO. VIII OF 2010)

Preamble.---WHEREAS it is expedient to continue, levy and revise certain

It is hereby enacted as follows:

1. Short title, extent and commencement.---(1) This Act may be called

(2) It shall extend to the Province of the Khyber Pakhtunkhwa.

2. Levy of tax on capital value of immovable property.---(1) A tax on the

(a) Immovable property other than commercial property,

No. Description of Rate of tax

(i) Where the value of the Two percent of the

(ii) Where the value of the Twenty five rupees

(iii) Where the immoveable Ten rupees per square

(b) Immovable Commercial and Industrial property of any size

No. Description of Rate of tax

(i) Where the value of the Two percent of the

(ii) Where the value of the Twenty five rupees

(iii) Where the immoveable Ten rupees per square

No. Description of Rate of tax

(i) Where the value 2% of the recorded value of the

Rs. 8/ per Sq-ft for basement

(ii) Where the value The amount of tax per Sq-ft of

(7) Where any person willfully fails to collect or having collected

(8) The Provincial Government, on an application by the assessee, from

(9) The Revenue Department, Khyber Pakhtunkhwa may, by notification

(10) The Provincial Government may, by notification in the official

Provided that such exemption may be subject to such conditions as may be

Explanation.---For the purposes of this section, the expressions-

(a) “Association of persons”, “Company” and “firm” shall have

(b) “development authority” means an authority formed by or

(c) “registration authority” means the person responsible for

3. Amendment of 5[Khyber Pakhtunkhwa] Ord. No. III of 2000.---In the

1. Services provided or rendered by hotels, marriage halls, lawns, clubs and

2. Advertisement on T.V. and Radio, excluding advertisement-

(i) if sponsored by a Government Agency for health education;

(ii) financed out of funds provided under grant-in-aid agreement; and

(iii) conveying public service messages, if telecast on television by the

(i) customs agents;

(ii) ship chandlers; and

5. Services provided or rendered for personal care by beauty parlors, beauty

(i) Telephone services

(ii) Fixed line voice telephone service

(iii) Wireless telephone

(iv) Cellular telephone

(v) Wireless local loop telephone

(vi) Video telephone

(vii) Payphone cards

(viii) Pre-paid calling cards

(ix) Voice mail service

(x) Messaging service

(xi) Short Message service (SMS)

(xii) Multimedia message service (MMS)

(a) Copper line based

(b) Fiber-optic based

(c) Co-axial cable based

(d) Microwave based