Environment protection: Punjab mulls carbon emissions tax

Proposal for Re1 per litre tax on petrol, diesel to be sent to provinces; new exemptions for women, orphans mulled

LAHORE: Prime Minister and Pakistan Tehreek-e-Insaf chief Imran Khan has given his blessings to a proposal to charge a one rupee per litre carbon emission tax on petrol and diesel being sold in Punjab in a bid to curb environmental pollution.

This was among the proposals forwarded to Punjab Chief Minister Usman Buzdar by the Punjab Excise and Taxation department. The recommendations also include a number of tax exemptions for women and orphans under the age of 25.

The excise department has also decided to start an express service for the registration and transfer of motor vehicles, according to which any application would be processed within 48 hours. The owners of motorcycles would be charged Rs300, while the owners of cars will be charged Rs1,000.

Carbon tax proposed to cut emissions

Meanwhile, there are plans afoot to conduct fresh surveys for property tax estimation in Punjab in August 2019.

The excise secretary has also directed that the administration of taxes on alcohol and spirits be streamlined to reduce corruption and improve regulation of the controlled substance. Punjab’s resource mobilisation committee has agreed with the budget advice of the excise department that women get increased property tax exemptions for residential properties, while orphans may also get exemptions till the age of 25.

Currently, the excise department only grants tax exemptions of up to Rs12,800 to widows and orphans under the age of 16.  The excise department prepared this recommendation based on the PTI chief’s announced policy to provide support and respect to women.

Punjab CM Buzdar had agreed with this advice while noting that the children of most widows are young and need financial support but noted that divorcees are also usually young women with minor children and they also deserve a tax exemption.

According to sources, PM Imran was recently presented with the excise department’s recommendation that a carbon emissions tax be imposed in Punjab to help curb damage to the environment. The tax would help finance green initiatives.

According to excise department estimates, the tax could easily generate between Rs8 and Rs10 billion per year. Imran approved the recommendation, but the Punjab government has to take the final decision on whether to implement a carbon tax and also whether excise department’s token taxes and transfer fees will be kept in place, reduced or revoked in order to provide some relief to the public.

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Currently, the department collects Rs7 billion per year from token tax and Rs500 million through motor vehicle transfer fees. However, the department faces difficulties in collecting token tax and the practice requires both, a large workforce and time for road checking, while citizens, in general, have shown little interest in paying the tax.

The property tax survey will be started early in the new financial year and is expected to take three months. Property records will also be updated through the survey and plans are afoot to set new property categories and rates.

Punjab Excise and Taxation Minister Hafiz Mumtaz Ahmed told The Express Tribune that he gave a briefing along with former excise secretary Sher Alam Mehsood on the issue of imposing a carbon tax on petrol and gas to Prime Minister Imran Khan, who agreed that it was actionable, and the Punjab Resource Mobilisation Committee also agreed with it. “Now the suggestion will be sent to the provincial cabinet for approval,” he said.

Excise Director General Akram Ashraf Gondal said that the proposal for a carbon emission tax on petrol and diesel price has been agreed to in principle and final approval will be sought from the cabinet. 

Published in The Express Tribune, May 31^st, 2019.

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