Luxury tax: Tax on high-end properties challenged

The petitioner said that the tax was unjust since the government was already charging property tax.


Our Correspondent August 01, 2013
The owners of houses on two-to-four kanals must pay Rs500,000, houses on four-to-eights kanals must pay Rs1 million, and houses on more than eight kanals must pay Rs1.5 million. PHOTO: FILE

LAHORE:


Justice Nasir Saeed Sheikh of the Lahore High Court on Wednesday sought a detailed reply from the government to a petition challenging the levy of luxury tax on properties on two kanals or more in some areas.


Petitioner Barrister Mian Bilal submitted that the provincial government planned to levy the tax on residential properties in areas specified as Category A under the Punjab Urban Immovable Property Tax Act, 1958. The owners of houses on two-to-four kanals must pay Rs500,000, houses on four-to-eights kanals must pay Rs1 million, and houses on more than eight kanals must pay Rs1.5 million. The petitioner said that the tax was unjust since the government was already charging property tax.

He said that the government had started sending notices to house owners and asked the court to direct the department concerned to desist from collecting the tax.

Published in The Express Tribune, August 1st, 2013.

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COMMENTS (1)

Babar | 7 years ago | Reply

Luxury tax. Hilarious! Here is an account of a citizen who describes what is a luxury tax. Read and decide. I received a challan yesterday from the Excise and Taxation officer of Lahore, demanding Rs 500,000 from me under the guise of ‘Luxury Tax’ on my house built on a two kanal plot in old Garden Town, Lahore. I built this residential house in 1963 for my personal use. I bought the two kanal plot for Rs 10,000, and it cost me Rs 45,000 to construct a three-bedroom house on it. Now after fifty years, the Punjab government has suddenly realized the oversight for having let its citizens avoid a tax on the outlandish luxury of living in a house. This is the only house that I own. I fully paid for it at the time, not as a luxury but as a necessity. Granted that this house is now worth many times its original cost, but that is its book value and would be subject to a value-added tax when and if I sell it. Apparently, and very much as expected, houses in Jati Umrah, Defence, EME Housing colony and Bahria Town are exempted from this tax on the feeble pretext that areas like Jati Umrah are classified as underdeveloped rural land. Perhaps this is aptly termed ‘Luxury Tax’, as in the end it will cover the amounts spent on luxuries enjoyed by its perpetuators; helicopter rides for their progeny, wrist watches worth crores, motorcades of limos, and penitent sojourns in holy lands for much needed redemption of all their transgressions. Who decides what defines luxury and necessity? Surely, if this is left to the whims of an incompetent elitist group with nothing but self-interest and delusions of grandeur, these are the sort of taxation schemes that will be thrust down our throats. Our ruling class is the quintessential ‘circular debt’ that this nation has unwittingly accumulated over the last several decades, and we continue to tolerate their antics in utter and submissive silence!

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