Revenue generation: New taxes introduced for big houses
Annual tax on vehicles of 1,300cc and above doubled.
Government will impose a tax of Rs250,000 per kanal to a maximum of Rs2 million on houses up to eight kanals with a covered area of more than 6,000 square feet in Lahore district. PHOTO: FILE
LAHORE:
The Punjab government has proposed imposition of taxes on big houses and a 100% increase in annual token tax on imported and locally assembled vehicles of 1,300cc or above engine capacity for fiscal year 2014-15.
It has also proposed annual tax on imported vehicles having engine capacity of 1,590cc and above. An increase of one percentage point in stamp duty on immoveable property has been suggested and more services have been brought in the tax net.
According to the Finance Bill 2014 tabled in the Punjab Assembly, the government will impose a tax of Rs250,000 per kanal to a maximum of Rs2 million on houses up to eight kanals with a covered area of more than 6,000 square feet in Lahore district including Lahore and Walton Cantonment boards.
It will levy Rs300,000 per kanal to a maximum of Rs3.6 million on eight kanals or above with covered area of more than 12,000 square feet.
In rating areas of divisional headquarters, districts and cantonments in the districts of divisional headquarters, tax will be Rs200,000 per kanal subject to a maximum of Rs1.6 million on houses with covered area of more than 6,000 square feet.
For covered area of more than 12,000 square feet, tax will be Rs250,000 per kanal subject to a maximum of Rs3 million on eight-kanal or above houses.
In the remaining rating areas and cantonments, the proposed tax will be Rs150,000 per kanal subject to a maximum of Rs1.2 million on houses with covered area of more than 6,000 square feet and Rs200,000 per kanal subject to a maximum of Rs2.4 million on eight-kanal or above houses with covered area of more than 12,000 square feet.
Motor vehicle tax
The government has also proposed amendments to the Punjab Motor Vehicles Taxation Act with the objective of bringing luxurious imported vehicles in the tax net.
Under the amendments, the province has imposed an annual tax of Rs20,000 on imported vehicles with 1,590cc engine capacity but not above 1,990cc, Rs25,000 on vehicles of above 1,990cc engine capacity but not exceeding 2,990cc and Rs35,000 on vehicles above 2,990cc.
These taxes will be imposed on vehicles manufactured overseas in the last five years while in the case of vehicles older than five years tax will be charged as per existing rates.
Similarly, annual tax will be doubled on vehicles with 1,300cc and above engine power.
Stamp duty
The province has proposed an increase in stamp duty from 2% to 3% on transfer of rights in immoveable property while reducing registration fee from existing 1% to Rs500 or Rs1,000 depending on the value of property.
Some additional services have been brought under the tax net by amending the Punjab Sales Tax on Service Act 2012. Under the amendments, GST has been levied on specialised workshops, repair and maintenance, indenting/brokerage, call centres, lab services (other than pathological and diagnostic testing for patients), physical fitness services, laundry and dry cleaning services, cable TV, TV/radio programme production and print media advertisements (reduced rate of 5%).
Published in The Express Tribune, June 14th, 2014.
The Punjab government has proposed imposition of taxes on big houses and a 100% increase in annual token tax on imported and locally assembled vehicles of 1,300cc or above engine capacity for fiscal year 2014-15.
It has also proposed annual tax on imported vehicles having engine capacity of 1,590cc and above. An increase of one percentage point in stamp duty on immoveable property has been suggested and more services have been brought in the tax net.
According to the Finance Bill 2014 tabled in the Punjab Assembly, the government will impose a tax of Rs250,000 per kanal to a maximum of Rs2 million on houses up to eight kanals with a covered area of more than 6,000 square feet in Lahore district including Lahore and Walton Cantonment boards.
It will levy Rs300,000 per kanal to a maximum of Rs3.6 million on eight kanals or above with covered area of more than 12,000 square feet.
In rating areas of divisional headquarters, districts and cantonments in the districts of divisional headquarters, tax will be Rs200,000 per kanal subject to a maximum of Rs1.6 million on houses with covered area of more than 6,000 square feet.
For covered area of more than 12,000 square feet, tax will be Rs250,000 per kanal subject to a maximum of Rs3 million on eight-kanal or above houses.
In the remaining rating areas and cantonments, the proposed tax will be Rs150,000 per kanal subject to a maximum of Rs1.2 million on houses with covered area of more than 6,000 square feet and Rs200,000 per kanal subject to a maximum of Rs2.4 million on eight-kanal or above houses with covered area of more than 12,000 square feet.
Motor vehicle tax
The government has also proposed amendments to the Punjab Motor Vehicles Taxation Act with the objective of bringing luxurious imported vehicles in the tax net.
Under the amendments, the province has imposed an annual tax of Rs20,000 on imported vehicles with 1,590cc engine capacity but not above 1,990cc, Rs25,000 on vehicles of above 1,990cc engine capacity but not exceeding 2,990cc and Rs35,000 on vehicles above 2,990cc.
These taxes will be imposed on vehicles manufactured overseas in the last five years while in the case of vehicles older than five years tax will be charged as per existing rates.
Similarly, annual tax will be doubled on vehicles with 1,300cc and above engine power.
Stamp duty
The province has proposed an increase in stamp duty from 2% to 3% on transfer of rights in immoveable property while reducing registration fee from existing 1% to Rs500 or Rs1,000 depending on the value of property.
Some additional services have been brought under the tax net by amending the Punjab Sales Tax on Service Act 2012. Under the amendments, GST has been levied on specialised workshops, repair and maintenance, indenting/brokerage, call centres, lab services (other than pathological and diagnostic testing for patients), physical fitness services, laundry and dry cleaning services, cable TV, TV/radio programme production and print media advertisements (reduced rate of 5%).
Published in The Express Tribune, June 14th, 2014.