Property tariffs to soar amidst rising inflation | The Express Tribune


LAHORE:

While some enjoyed fireworks, others saw in despair as a proposed mini-budget would further increase taxes in the new year and now to add to those worries is a potential increase in property taxes for the people of Punjab.

At present there are 518 property tax circles in Punjab and in total property tax is levied on more than 2 million commercial and non-commercial properties. In order to assess the market value and rental value of commercial and non-commercial properties in Punjab and to compile a new property tax valuation table, the Excise Department has selected 500,000 properties in the province to survey – which includes commercial and non-commercial, self, and rental properties.

Director General Excise and Taxation Punjab Rizwan Sherwani, while talking to The Express Tribune, termed the new survey as the most modern tax survey in history of the country. “The valuation table that will be formed after the completion of the survey will be so comprehensive and credible that every institution including the Federal Board of Revenue (FBR) and Board of Revenue will recognize it,” said Sherwani.

After the tax survey a new valuation table will be prepared and The Express Tribune learned that there is a strong possibility that the property tax rate will increase by more than 25%. Faraz Ahmed, a trader in Shah Alam Market, commenting on the potential increase in property taxes said that in order to run the government one has to pay taxes but if the government collects taxes then it should also provide facilities to the people. “Here the government only knows how to take, it does not know how to give,” he lamented.

Read More: Inflation to stay in double digits in Dec

However, as per the law, a new property tax must be levied every five years, but due to political reasons and administrative difficulties, the survey has been delayed extensively. The last survey was conducted in 2014 and the one before was conducted in 2001.

Despite property taxes not being increased the past 7 years, residents of the country’s most populous province, already tired of the rising inflation, are not happy and are least bothered with the quality of the survey. Abdul Haq, a resident of the Gulshan-e-Ravi area in Lahore, said that the present government has given nothing other than inflation. “Food inflation has made it difficult for the people to raise children, so now the government is raising property taxes to make it harder to live at home,” an irate Haq said.

Similarly, Parveen Begum, a resident of Gulberg, told The Express Tribune that the rulers were pushing the people under a mountain of financial burden. “Even now my house’s annual property tax is high, and if the government increases it by 25%, how will I pay?” she inquired.

However, Professor Shehzad Akram, who teaches economics at the University of Home Economics Lahore, holds a different view. “Property prices and rents have increased tenfold in the last seven years so there is nothing wrong with the government increasing taxes,” he said. Akram, however, suggested that instead of imposing the tax tariff on the people in one go, the burden should be implemented in phases.

Punjab Minister for Excise and Taxation, Hafiz Mumtaz Ahmad, when inquired about the added burden on people, said that they were well aware of the plight of the people, however, during the pandemic, they had given people a relief of Rs 3.20 billion in terms of property tax. “The government system has to be run by taxes. We have not yet decided on the exact tax rate but one thing is clear: the tax tariff will definitely increase,” Ahmad told The Express Tribune.

Published in The Express Tribune, January 8th, 2022.




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