Internal politics: Cantonment board says it’s time for schools to pay up

If authorities succeed in charging the tax, schools will have to pay anything between Rs150 and Rs200 per square foot.

KARACHI:

Schools located in Defence and Clifton may have to pay property tax after their request for an exemption was recently rejected. 

More than 30 schools, including those run by the Defence Housing Authority (DHA), had made a plea that they are run on non-profit basis, but the Cantonment Board Clifton (CBC) refused to accept their claim.

Authorities concerned say the schools charge an excessive tuition fee which makes the institutions very profitable, officials familiar with the matter told The Express Tribune. The average tuition fee of the schools in Defence and Clifton is over Rs12,000 a month.

“The government had sent a notification asking us if these schools can be exempted from tax, but we said no,” said Sajjad Nazir, the assistant secretary revenue at CBC. “We are preparing a list of schools and how much land they occupy so we can tax them accordingly.”

Initially, the DHA had sought exemption for 11 of its own schools. “If they were part of a foundation or trust then things would have been different. But they are being run on commercial basis,” he said.

If authorities succeed in charging the tax, the schools will have to pay anything between Rs150 and Rs200 per square foot.

Another CBC official also working on indentifying untaxed places in Defence said that the tax will not be high. “It won’t be a burden in any case because these schools earn a lot of money.”

As maintenance costs increase, it is becoming increasingly important for the CBC to tax people. Officials say conservancy expenses, which include cleaning roads and picking up garbage, have surpassed Rs375 million.

DHA-CBC impasse

Officials say every school in DHA and Clifton Block 8 and 9 has been built in violation of building by-laws. “How can you open up a school in a residential area?” said the CBC assessment officer.

The DHA-run schools have been constructed on amenity plots, while other private schools were given permission by the DHA and not CBC, which is the municipal service provider.

“Just look at the names of the schools which have been allowed to operate in this part of the city and you will see that they have the muscle to deal with DHA,” said a person familiar with the authority’s workings.

The issue of taxing schools is part of a bigger problem of overlapping powers between the two bodies. DHA is selling its land to different businesses without informing the CBC, officials say.

The brighter side

School owners say that DHA should be made to pay property taxes since it has leased the land.

Principal of the International School, Taymur Mirza, said that CBC is not concerned about parents having to pay a high fee. “They are only interested in the money. It is part of their mentality to drain money out of anything that is doing well.”

“They should have given us the land for free because we are working to promote education,” he said.  “I admit I charge Rs20,000 a month but why should a school be targeted?” Being a private limited company, his school pays income tax and contributes to the EOBI.

“It’s not our fault that there is poor planning. Those who say schools can’t be built in residential localities are crazy because every neighbourhood everywhere in the world has schools within its vicinity,” he said.

Private schools say they have spent millions on construction, have high security expenses and are not given any assistance from the government. The DHA and CBC’s vigilance staff does not provide security at the schools, which have hired their own guards.

Published in The Express Tribune, December 29^th, 2011.