Luxury residences: Govt asked to provide revenue estimate

Petitioners say tax not being imposed in DHA, Cantt, Bahria Town.

LAHORE: A Lahore High Court division bench has directed the Punjab government to submit details about levy of a new luxury tax in Punjab and how much it expects to collect.

The bench consisting of Justice Ijazul Ahsan and Justice Ayesha A Malik also summoned the attorney general to assist the court at the next hearing on December 4.

The bench is hearing more than 400 petitions challenging the new tax announced by the Punjab government in the 2013-14 budget. The tax is aimed at large properties in richer neighbourhoods in the province. Residential houses of between two and four kanals in areas classed as Category A under the Punjab Urban Immovable Property Tax Act of 1958 are to pay a one-off tax of Rs500,000, houses of between four and eight kanals are to pay Rs1 million, and houses of more than eight kanals are to pay Rs1.5 million. The Excise and Taxation Department has sent notices to several homeowners demanding payment of the tax.

Petitioners’ counsel Raza Kazim argued that the new tax was unjust when the government was already charging property tax. Further, the levy of the tax in some neighbourhoods and not in other posh areas like Cantonment and DHA amounted to discrimination.

Muhammad Azhar Siddique, who is also representing the petitioners, said that the tax was not being imposed in Bahria Town, Lake City, Sukh Chayn, EMI, Defence and Cantt.

This meant that properties like the huge house built for Asif Zardari in Bahria Town, Nawaz Sharif’s house in Jati Umra and Shahbaz Sharif’s house in Defence were exempt.

He said that in its reply to the petition, the provincial government had said that it had levied the tax based on a survey conducted in 2011. He said that the government should conduct a fresh survey. He asked the court to set aside the notices issued by the Excise and Taxation Department as unconstitutional.

Published in The Express Tribune, November 21^st, 2013.