Punjab govt to present over Rs 400 bn budget-Extending the property tax

[CMY]

LAHORE: The Punjab government will present over Rs 400 billion budget for the fiscal year 2008-09 with an allocation of more than 135 billion rupees under the Annual Development Programme (ADP) projects.

This year, the expected increase in the total budget outlay and the ADP is 10 to 15 per cent, sources involved in the process of budget-making said. The last year's total outlay of the budget was Rs 356.17 billion and the revised amount of the ADP was Rs 122 billion against the original ADP amount of Rs 150 billion.

Like the previous budget, the coming budget will also give priority to health, education and law and order while a substantial amount will be spent on subsidy in food and transport fares, sources said.

The amount on food subsidy will be around Rs 20 billion while around Rs 500 million will be allocated for transport fares subsidy. The transport fares subsidy will be given only on urban transport routes in line with international pattern. Seven big cities would be targeted for this subsidy, the sources added.

For food programme, the government has been chalking out a strategy either to give this subsidy directly to the targeted people like the federal government's 'Benazir Card Scheme' or to provide flour, cooking edibles and cereals to the lowest segments of the society.

No new taxation would be introduced in the forthcoming fiscal year; however, the government has been evolving a strategy to expand the existing tax base of the province by extending the property tax.

In this regard, the government would net those tax evaders who had small pieces of property like apartments, flats and others worth millions of rupees.

However, implementation on this policy will not start from July 2008, the sources added. To net such tax evaders, the government needs to change the existing law, as without amendments, such tax evaders cannot be caught.

For this, the government will amend the law of property tax exemption for five-Marla houses and impose tax according to the evaluation of the house. Currently, all houses on five-Marla or less are exempted from the property tax.

The government is considering declaring a number of rural areas as urban areas to impose property tax on these localities. For this, the government has to amend the Punjab Local Government Ordinance 2001, as there is no specific definition of rural and urban areas in the ordinance. However, the government is not ready to touch the agriculture tax this year.

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