No amenities, no property tax for rural areas in Punjab

RAWALPINDI: The provincial government on Thursday suffered a massive economic blow after a court declared as illegal property tax charged for houses and shops constructed in rural areas of the province and cancelled a notification for the tax.

The order was issued by a single-member Lahore High Court (LHC) Rawalpindi Bench, comprising Justice Shakeelur Rehman Khan, while hearing applications against the tax.

The application had been filed by 13 people, including four chairmen of different union councils, including Union Council Rehmatabad Chairman Taj Abbasi. They had contended that the provincial government does not have the right to charge property tax because the government does not provide any basic amenity such as piped water, sewerage, drains and cleanliness like they do in the cities. Hence, this city-esque tax should not be applicable to the rural areas as per the law.

 In rural areas, homes are usually built over small areas, from 1.5 marlas to five marlas. Such small houses, they contended, are even exempt from property tax in the cities as well then why should such small houses get taxed in the rural areas.

They told the court that the excise and taxation department was harassing the families living in the rural areas by sending them property tax receipt between Rs10,000 to Rs20,000. The applicants demanded the court to declare the notification as illegal.

After hearing the argument, the court declared that property tax cannot be imposed on rural areas the way it is done on urban areas and upheld the stance adopted by the petitioners.

Justice Shakeelur directed the government to listen to the stance of the petitioners and to arrive at a conclusion based on merit.

The court also stopped the government from charging property tax from rural residents. The property tax had been imposed by former Punjab chief minister Shahbaz Sharif in 2017 through a notification.

Published in The Express Tribune, February 22nd, 2019.