LAHORE: The Punjab Chief Minister's Advisor on Finance and Taxation, Zia Haider Rizvi, said on Wednesday that a downward revision in the rate of the Property Tax was on the cards and it would be brought at 10 percent instead of 25 percent.
Speaking here at Lahore Chamber of Commerce and Industry,he said the property survey would be conducted in Punjab to enhance the scope property tax collection, adding that tax rate would be finalized after taking the masses on board, while, the Excise and Taxation Department would also coordinate with LCCI in this regard.
The Advisor said the discretionary powers of the tax inspectors would also be curtailed to make the system more effective through improvement in implementation process.
He also agreed with Lahore Chamber's proposal and promised to include LCCI representatives in Evaluation Committee of the Punjab government for Property Tax.
While, the LCCI President Farooq Iftikhar said the tax machinery required major overhauling and revamping. Reforms of major taxes such as Property Tax were not implemented as the same had caused additional financial burden on tax payers, he observed. However, creation of Punjab Revenue Authority was an important policy of Punjab government that would improve tax administration and management, besides, plugging leakages in the revenue collection.
He said the LCCI members had some serious concerns relating to Professional tax, citing that in Financial Year 2011-12, the Budget Estimate for Professional Tax was Rs 510 million which was revised to Rs 488 million and FY 2012-13, it was Rs 887 million, which was 97 percent higher than the preceding year.
He suggested to abolish Professional Tax and the same might be collected under the head of tax on services, and there should be no direct interaction between the tax collectors and taxpayers.
In FY 2011-12, the Budget Estimate for Property Tax was Rs 5.58 billion, which was revised to Rs.4.30 billion, while, in FY 2012-13, it was Rs 5.91 billion (32 percent higher).
The business community had a lot of reservations concerning Property Tax, he said, the value assessment of property was done for covered area and in terms of per square feet.
In some cases where shops were rented to shopkeepers sometime ago like 10 to 20 years, the tax exceeds the rent because the rate of tax varies on the basis of area.
If any organization was maintaining office away from the main road, he blamed that tax authorities unfairly apply the same rate of property tax which is applicable on main commercial road.
Our members often complain that during valuation of property tax, the tax official also include such areas in calculation which are adjacent to main office and used only for keeping leftover items. Likewise, the tax rate of double storey building is only applied when there are separate stairs available to approach it.
In case of any dispute between taxpayer and tax administration, the department issues a notice to collect penalty at the rate of one percent, which was quite unfair.
There was a time when tax was applied at the rate of 2 percent in case of partition of a property among the family members but due to the efforts of LCCI, it was fixed at Rs 500, he said and added, "We propose that the same rate must be applied on partition of business property among family members, and such areas which fall away from the jurisdiction of a city should be brought within its limits, as the potential of Property Tax has yet to be fully assessed and tapped."
Punjab Revenue Authority (PRA) Chairman Iftikhar Qutab, LCCI Vice President Mian Abuzar Shad and other prominant businessmen also spoke on the occasion.
<Center><b><i>Copyright APP (Associated Press of Pakistan), 2013</b></i></center>
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