Punjab government failed to tax urban rich: expert

Punjab government led by Chief Minister Shahbaz Sharif has failed to tax urban rich as it would collect only paltry amount of Rs 6.56 billion as property tax during the FY 2011-12, said agronomist Farooque Bajwa here on Monday.
Talking to Business Recorder here on Monday Bajwa said that the Budget documents indicate that out of total budget of Rs 654.66 billion Punjab government's provincial receipts would be only Rs 114.24 billion whereas it would receive Rs 530.88 billion from the divisible pool of the Federal government.
He said that urban contribution to the provincial receipts is only 21.24 percent whereas agriculture sector would contribute 56.6 percent to the provincial income. He said that economists were expecting that after devolution of power under the 18th Amendment, the Punjab government would generate enormous revenues by taxing the rich and their urban properties worth trillions of rupees.
He said the annual receipts of Rs 6.56 billion through property tax is peanuts as compared to the real and rental values of these properties. " More than Rs 10 billion could be collected as property from one part of Lahore city, ie Shadman, Gulberg, Model Town, Cantonment, and DHA.", he added. Bajwa said it is regrettable that the provincial government would get more than Rs 60 billion from the agriculture sector whereas it would be spending very small portion of it on the development of the agriculture sector and welfare of the farming community. It has allocated Rs 11.25 billion for irrigation, Rs 2.5 billion for livestock and Rs 3.4 billion for agriculture development.
It may be recalled that Punjab government imposed new taxes in the budget 2011-12 by imposing tax only on farm houses, elite clubs, swimming pools, duty on special classes of entertainment and enhancing rate of token tax of vehicles with engine capacity of 1,000cc or more.
The rate of token tax was revised in 2004 but now once again it was revised and it is proposed to rationalise it with the current value due to inflation. The government proposes to levy farm house tax as there are palatial farm houses constructed by affluent persons outside the urban rating areas. The government did not enhance the old property tax rates in the FY 2011-12.