PESHAWAR: The provincial government is set to start deduction of professional tax from salaries of employees including doctors after enforcement of new taxation regime, a move opposed by doctors.

An association of doctors says that its case against imposition of professional tax is pending in court.

Sources said that the new taxation regime was sanctioned by government in 2019 but it was deferred due to onset of Covid-19 pandemic in the province.Sources in excise, taxation and narcotics control department told Dawn that the new levy had been included in Khyber Pakhtunkhwa Finance Bill, 2019, passed by the provincial assembly in June 2019. The law was signed by the governor.

Now, with some modifications in taxation rates, it has been enforced in the province since July 2022.

According to the law, any person engaged in any profession, trade or employment will pay tax. A specialist doctor will pay Rs80,000 annual tax while nonspecialist will pay Rs30,000 tax per year. A dental surgeon will be required to pay Rs15,000 tax per year.

People earningupto Rs20,000 will stand exempted from taxation while those earning up to Rs30,000 will pay Rs1,000 tax per month. People earning up to Rs50,000 will pay Rs1,200 and people having an income of Rs50,000 to Rs100,000 willRs1,500 and those with Rs100,000 to Rs200,000 income will pay Rs2,000 tax per month while the ones with income ranging from Rs200,000 to Rs500,000 will pay Rs3,000 a month.

Sources said that as per new regime, people earning more than Rs500,000 would pay Rs5,000 per month. They said that government employees in BPS-1 to BPS-6 were exempted from taxation while those from BPS-7 to BPS-12 would pay Rs1,000 on monthly basis.

They said that Rs1,200 would be deducted at source from the salaries of employees working in BPS-13 to BPS-16 while the taxes ratio for BPS-17 was Rs1,500, for BPS-18 it was Rs1,800 and for BPS-19 was Rs2,000 while for BPS-20 and above the tax was fixed at Rs3,000.

Sources said that excise and taxation department had already issued instructions torelevant authorities for deduction of tax from salaries of employees and rates had been notified for the purpose.

Meanwhile, Provincial Doctors Association (PDA) wrote a letter to the director of excise, taxation and narcotics control department of Khyber Pakhtunkhwa to exempt doctors from professional tax.

`It has come to our attention that the department has issued notices regarding deduction of professional tax from doctors.

We would like to highlight that PDA had previously filed a petition in 2020, which was consolidated with a related writ petition filed by lawyers and subsequently stayed by the honourable court,` said the letter.

It said that two other petitions concerning professional tax were recently disposed of, however, their case remained active and was scheduled for next hearing on April 15, 2025. It is important to note that anamendment to Finance Act, introduced by former finance minister, significantly increased the tax burden on doctors without distinction of cadre or income.

The letter said that the additional taxation was a matter of concern, as doctors already contributed through regular taxes in accordance with the rules applicable to civil servants. It said that imposing such a substantial tax was unjust. It added that notably, the professional tax was previously waived off by the PTI-led government during the Covid-19.

`Given that the matter is still sub judice, and in the spirit of constructive engagement with the government, we respectfully request that your office instruct the finance department and respective finance officer to halt the deduction of professional tax from doctors until a final decision is reached,` it said.