High property tax rates hindering growth: LCCI

Chamber suggests tax increase should be 50% spread over three years

LAHORE: The Lahore Chamber of Commerce and Industry (LCCI) has demanded downward revision in the rates of property tax, saying the existing levels are too high and hampering growth of businesses.

In a statement on Wednesday, LCCI President Abdul Basit, Senior Vice President Amjad Ali Jawa and Vice President Muhammad Nasir Hameed Khan said the high property tax worked against business interests and the chamber of commerce had received scores of complaints from its members about the mounting tax burden.



They pointed out that industrial units in rural areas were receiving tax notices with area measurement from the Town Municipal Officers. “Wherever the industry is situated, it is considered an industrial area. The industry in rural area must not be treated as that in an urban area,” they said.

They believed such actions were bound to cause damage to the socio-economic structure, which would ultimately hit the present government. The government must initiate public-private dialogue to address the challenges being faced by business-doing people who were the backbone of the economy, they suggested.

Citing examples, the LCCI office-bearers pointed out that Davis Road and MM Alam Road in Lahore had been put in the ‘A’ category, though commercial value of the property at MM Alam Road was many times higher than that at Davis Road.

Moreover, the excise department determines property tax on the basis of the rent charged at MM Alam Road while rental value at Davis Road is only one-third of that at MM Alam Road.

“Such discrepancies should be addressed to make the system more transparent,” they said. The LCCI office-bearers suggested 50% increase in the property tax rate spread over a period of three years under the formula (20, 20 and 10%) and relief for the people who deposited the tax by adjusting remaining amount in coming years.



They revealed that the Excise and Taxation Department had served notices in various markets, which were then replaced with new notices with a 50% increase. “This process of serving notices should be revised.”

They were of the view that the business community was not ready to accept even 1% increase in commercial property tax rates because of the current economic conditions. They suggested bringing down the commercial rates to 0%.

Published in The Express Tribune, September 14^th, 2017.

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