Punjab startled by unprecedented property taxes

While public protests tax surge, govt alleges mix-up rooted in previous regime’s calculations

LAHORE:

A misinterpretation of tax waivers during application of new property tax valuation table by the former PML-N regime in Punjab, has led to more than 1.9 million taxpayers having to pay levies surged by 60 to 140 per cent this year.

Owing to the high tax rates in the valuation survey, the previous government had decided to collect half of the new taxes upfront, while the remaining was to be collected in form of a 10 per cent increase every year. But for reasons unknown, tax remission was still given based on the 2001 valuation table, instead of the new 2014 tax survey.

Considering the implementation of the new valuation table in the next financial year, the present government had eventually abolished the tax exemption. However, the mistake of the previous government was highlighted when people started receiving tax challans according to the 2014 valuation table with the extraordinary increase.

Following the resulting public and business community protests, the Punjab government has withdrawn its decision to abolish the remission of property tax. Accordingly, new tax challans with a lower property tax after the remission will be issued to the people for the current financial year. As per the provincial government’s decision, property tax will be increased by only 10 percent over last financial year.

Read K-P businessmen seek removal of property tax

Subsequently, sources reveal that more than 1.9 million property owners of Punjab will get a total relief of about Rs1.45 billion. The cabinet however, will give its final approval to the recommendations of the Resource Mobilization Committee, which was constituted by the chief minister and is headed by the provincial finance minister

“The challans received by the public for payment of property tax for the current financial year are 60 per cent to 140 per cent higher than the previous financial year, which is being strongly protested by the people,” the source confirmed. “Due to the unusual public reaction, the Chief Minister has formed a special committee headed by Finance Minister Hashim Javan Bakht to investigate and resolve the issue. The committee also includes the likes of Excise Minister Hafiz Mumtaz and Secretary of Finance and Excise are also included,” he added.

At present, property tax is being collected from more than 1.3 million residential properties and more than 600,000 commercial properties in Punjab, while 65 per cent of the total property tax is collected from commercial and 35 per cent from non-commercial properties.

Talking to Express, Punjab Excise Minister Hafiz Mumtaz Ahmed said that the recent increase in tax was owed to tax exemption by the previous government. “The Chief Minister has directed that the public grievances arising out of this increase should be alleviated. Therefore, a special committee headed by the Finance Minister will review the situation and submit its recommendations to the Chief Minister who will announce some kind of a property tax relief for the people,” he assured.

Published in The Express Tribune, September 18^th, 2021.