Provinces’ property tax revenue doubles to Rs4.75bln in July-Dec

KARACHI: Property tax collection by the provinces almost doubled to Rs4.75 billion during the first half of the current fiscal year of 2016/17 as the government’s upward revision in real estate values scaled up contribution to national exchequer, official data showed. 

The ministry of finance, in its latest half-yearly statistics, said the provinces collected Rs2.43 billion in July-December of 2015/16.   Recently, the federal government announced reforms in property valuation for determination of income tax on the amount invested in real estate sector. Subsequently, the Federal Board of Revenue (FBR) issued new valuation tables for 20 major cities across the country.

The FBR’s valuations are comparatively higher than the rates determined by the provincial district collectors. Since the immovable property transactions are now made on the basis of FBR new valuation tables, the tax revenue is increasing.

Punjab government registered 106.26 percent growth in property tax collection, followed by Sindh (98.92 percent), Khyber Pakhtunkhwa (36.88 percent) and Balochistan (6.97 percent).

The revaluation of immovable properties by the federal government also helped the provinces enhance their collection from stamp duties. The stamp duties collection by the provinces grew 11 percent to Rs16.6 billion in July-December 2016/17.

The finance ministry data showed that the provincial sales tax on services collection rose 30 percent to Rs76 billion during the first half of the current fiscal year.  Overall tax collection by the provinces amounted to Rs145 billion in the first half as compared to Rs122 billion in the same period a year earlier.

Published in The News, February 16th,2017