Punjab Chief Minister Shahbaz Sharif has approached the Ministry of Finance to immediately abolish federal government's Capital Gain Tax (CGT) on the disposal of immovable property, empowering the province to levy CGT on immovable property following 18th Constitutional Amendment.
Sources told Business Recorder here on Monday that Chief Minister Punjab Shahbaz Sharif has requested Finance Minister Ishaq Dar to abolish CGT imposed by the federal government on the sale of immovable property. Punjab has suspended the collection of CGT on immovable property until the federal government withdraws CGT on immovable property. Following abolition of CGT on immovable property by the federal government, Punjab would be in a position to collect CGT on such property under the provisions of the Punjab Finance Act, 2013.
According to the letter of Punjab Chief Minister Shahbaz Sharif addressed to Finance Minister Ishaq Dar, attention is drawn to the important issue of taxes levied by federal government on the immovable property. Federal government has imposed advance tax on sale or transfer of immovable property, advance tax on the purchase or transfer of immovable property and CGT on the disposal of immovable property.
In the wake of the 18th Constitutional Amendment, provincial assembly is competent authority to levy any kind of tax on immovable property including CGT. The government of the Punjab introduced Capital Gain Tax through Punjab Finance Act 2013, however, the provisions for its enforcement are under suspension till the time federal government revokes its CGT. The imposition of aforementioned three taxes by the federal government is severely undermining the provincial receipts, Shahbaz Sharif said.
In view of the foregoing, it is urged that the taxes levied by federal government may be withdrawn at the earliest to make the tax regime consistent with the provisions of the Constitution as well as to enable the Punjab government to enforce the Punjab Finance Act, 2013, the Chief Minister added.
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