The measurement-based system implemented by the Excise, Taxation, and Narcotics Control Department to collect property tax from citizens based on property rates set by the Deputy Commissioner (DC) in the districts has failed, causing a 55% shortfall in property tax collection.
There has been a 45% reduction in the tax on commercial units according to the DC rates, while domestic property owners, including those with one-marla houses, have been reintroduced into the tax net. Additionally, the exemption on property tax for five-marla houses has been removed, leaving citizens confused.
Previously, the Excise Department set property tax rates based on the measurements of properties. From January 1, 2025, however, the tax calculation system shifted to using the rates set by the DC, eliminating the previous measurement-based system.
This change has resulted in a significant decrease in the commercial property tax rates in markets, plazas, and shopping areas, where tax for commercial units has dropped by 45%.
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