Houses measuring 1,000-2,000 square yards are taxed Rs500,000; houses measuring 2,000-4,000 are taxed Rs1 million. PHOTO: FILE
A one-time luxury tax on residences measuring 1,000 square yards and more is proposed to be extended to the Cantonment and Defence Housing Authority, The Express Tribune has learnt.
The budget 2013-14 had provided for a tax on residential units in areas specified as Category A under the Punjab Urban Immovable Property Tax Act 1958.
Houses measuring 1,000-2,000 square yards are taxed Rs500,000; houses measuring 2,000-4,000 are taxed Rs1 million; and houses measuring 4,000 square yards and above are taxed Rs1.5 million under Section 10 of the Punjab Finance Act 2013.
The Excise and Taxation Department had estimated Rs1.5 billion revenue from the tax every year, an official speaking on a condition of anonymity said.
The E&T Department has printed out a summary in this regard that many properties with similar specifications had escaped the tax because the categorisation had not been revised since 2001. In order to remove the resulting discrimination, categories were being rationalised and upgraded based on current market rate assessment.
The department was advised by Law and Parliamentary Affairs Departments to extend the scope of luxury tax to houses in the DHAs and Cantonments in the province under the PFA 2013. The Law Department also advised the government to outline objective criteria for property categorisation and extend luxury tax to houses in DHA and Cantonments under the terms of Section 10(12)(C) of the PFA.
The Finance Department has also endorsed the proposal for the imposition of luxury tax on residential units whose specifications and rent assessment are at par with houses in Category A as identified by the Punjab Urban Immoveable Property Tax Act, 1958.
The E&T Department will notify the areas in Cantonments and DHAs that have properties whose assessed rental value is equivalent to houses in Category A, he said.
There are eight Cantonments and a DHA in the Punjab and thousands of houses meet the requirements for imposition of the luxury tax, he said.
The E&T Department has sent a summary, with recommendations from the Law and Finance Departments, to the chief minister for approval. After the approval, the areas falling in the tax net would be notified, the official said.
Published in The Express Tribune, January 4th, 2014.
COMMENTS
Comments are moderated and generally will be posted if they are on-topic and not abusive.
For more information, please see our Comments FAQ