Property tax on villages

EDITORIAL: Apparently, the Punjab government is itching to bring property in villages into the ambit of tax. The issue came under discussion in the Punjab Assembly, but had to be put off for a discussion as Speaker Chaudhry Pervez Ilahi found the concerned proposer short of logic in support of taxing the little dwellings that the villagers live in. An average house in the Punjab villages is built on a five-marla or smaller plot, and inhabited by five or more than five persons. The government does not provide them any basic amenity such as piped water, sewage drains and cleanliness, while the houses built on plots of five-marla in cities get these services and are exempted from property tax. The government move is also in violation of the court order that in its verdict in a case in 2019 declared illegal the property tax charged for houses and shops in rural area of Punjab, and annulled a property tax notification. As for the landholdings, the villagers duly pay revenue tax that is applicable in Punjab since 1887, and all other levies that are applicable in urban areas, including sale/purchase of land. According to an estimation, should government go ahead with its plan to tax rural properties the net output will not be more than 2 percent of national tax total, but far more proportionately expensive for the government to impose and collect the proceeds through this levy. Of course many villages have become larger or more extensive in terms of their populations. Moreover, some of these have expanded so much so that they are now touching urban centres. Such ‘villages’ are, therefore, commercially rich enough to qualify to be duly taxed. But what is the definition of the word ‘village’? Is there an official record that shows the names and locations of villages that can be treated as taxable towns and cities? Even more importantly, before the government goes ahead with its plan to tax village property it should look into the negative fallout. It must not lose sight of the fact that more than 60 percent of country’s population still lives in rural areas. Even when a villager is relatively poor in terms of his standard of living, he can somehow strike a balance between his needs and their availability, hence the need for protecting and preserving villagers’ way of life.

Copyright Business Recorder, 2021