Buildings on highways and motorways to pay property tax

Data of roads and buildings has been sought from Punjab Urban Unit and highway authorities

LAHORE: The Punjab Department of Excise and Taxation has prepared rules to collect property tax from the owners of over 700,000 buildings located on both sides of the 40,000 kilometre-long federal and provincial highways/motorways.

The tax exemption on property of the Punjab local government department, retired government employees and land of welfare institutes (as well as the offices and the buildings built on them) will be withdrawn.

The collection of property tax on highways has been abolished, while buildings on highways have been categorised for tax collection. Data of the roads and buildings has been sought from the Punjab Urban Unit and the Punjab Highways Department. For the purpose of measuring the land of buildings and covered area, laser measurement, 3D photography and drone cameras will be used. Besides, the Sindh government has decided to seek the services of the Punjab Urban Unit for the digital and GPS survey for property tax. In this regard, a pilot project will soon be initiated in the specific areas of Karachi.

In Punjab’s budget for the current financial year, the excise department has prepared the formula for the rules and assessment to collect property tax. The deputy commissioner will determine the rates which will be imposed on the property on both sides of the highways/motorways.

The Department of Excise and Taxation has categorised highway property tax in accordance with financial volumes. Therefore, small traders or shopkeepers would not face an extra burden. However, notified DC rates will be uniform in every category.

For the highways, various exemptions had been abolished to collect property tax. These include the exemptions on five marla buildings, retired government employees’ properties as well as welfare institutes and organisations. Meanwhile, the offices, buildings and land of the local government also have to pay tax. Only the buildings and land owned by the federal or provincial government are exempt from tax.

In a meeting held recently, Punjab Excise Minister Hafiz Mumtaz Ahmed and Secretary Wajeehullah Kundi clarified that officers and employees of the department should make themselves aware that this levy is altogether different from the tax collected in cities.

They said taxes collected in urban areas are based on rental value, while this will be based on the price of land on the highways. The minister and secretary said the government had spent billions of rupees on highways and motorways. Therefore, the prices and value of properties there were increasing and the government aimed to collect taxes from them to spend on public welfare projects.

Besides, the Punjab Excise and Taxation Department has decided to use technology as officials observed that a visit by an excise inspector to a person’s residence is often frowned upon. Therefore, modern instruments would be used to determine the covered area of houses and buildings, with the cooperation of Punjab Urban Unit. 

Published in The Express Tribune, September 18^th, 2019.