FBR rejects president’s taxation proposal

President’s proposal to tax house owners in order to raise flood relief funds is not implementable.

ISLAMABAD: The Federal Board of Revenue (FBR) has declared that the president’s proposal to tax house owners in order to raise funds for the reconstruction of flood affected areas is not implementable.

Elaborating on the reasons for the FBR’s disapproval, an official of the tax collecting body explained that house owners include widows and the elderly who have no constant source of income or other private assets except for their respective houses. He suggested that if such a tax was imposed it would be beyond the legal limits of the federal government and the tax could be challenged in the courts since it is against the basic rights of an individual.

Earlier on, President Asif Ali Zardari had suggested that a one-off tax between Rs50,000 and Rs500,000 be levied upon land and house owners in left bank of River Indus to finance reconstruction and rehabilitation efforts in the province following the catastrophic floods.

Meanwhile, the Sindh government has also called a high level meeting on Wednesday to examine the president’s proposal.  The meeting will be chaired by the Sindh’s Finance Minister Murad Ali Shah.

Explaining that each tax has its pros and cons, an official of the Sindh government said that methods for executing the tax and its legal status will be discussed during the meeting.

Published in The Express Tribune, September 8^th, 2010.