LCCI calls for downward revision of property tax

The Lahore Chamber of Commerce and Industry has called for downward revision of property tax rate as existing rate is too high and hindering the growth of businesses. The LCCI President Abdul Basit on Wednesday said that high property tax is against the business interests. The Lahore Chamber had received a number of complaints from its members against increase in the property tax. Unfortunately, the industry located in rural areas is served tax notices with footage measurement by the TMOs. Wherever industry is situated it is considered an industrial area. The industry in rural areas must not be treated as that in urban areas, he added.
Keeping in view the present scenario, such actions are bound to cause irreparable damage to socio economic structure which would ultimately hit the present regime. He proposed that both the provincial and federal governments should come out with a formula about the maximum and minimum percentage of one's income and what the person or people should expect in return.
The government must initiate public private dialogue to resolve the issues of businesses which form the backbone of the economy. Citing an example he pointed out that in Lahore, Davis Road and M.M Alam Roads have been put in "A" category though the commercial value of property at M M Alam Road is many times higher than that of Davis Road. Moreover he added the excise department determines the property tax on the basis of rent charged at M M Alam Road while the rental value at Davis Road is one-third. He said such discrepancies should be addressed to make the system more transparent.
The LCCI president said that government has to resolve the issue of increase in property tax rates immediately as it is creating unrest in the business community. He suggested an increase of 50 percent in property tax rate with a three year cascading formula (20-20-10) and relief for those who deposited their taxes by adjusting their remaining amount in the coming years.
The Excise and Taxation Department has served notices with unprecedented increase in various markets which were then replaced by new notices with 50 percent increase therein as mentioned by the E&T department. This process of serving notices should be revised, he added.
The business community is not ready to accept even one percent increase in the commercial property tax rates due to the current economic conditions in the country. He suggested bringing down the commercial rates to zero percent. Business community hopes that property tax rate would be brought down in their larger interests. The levy of luxury tax in addition to property tax is unjustified, he maintained.