KARACHI, Nov 24: The city government has proposed to increase property tax rates on industrial units by 100 per cent and on residential and commercial units by 50 per cent.

The new rates suggested by the Gulshan Town administration in a resolution, now referred to the Sindh government for approval, are: (existing rates given in brackets): Residential 75 paisa per sq ft (50 paisa); Ordinary commercial Rs6.50 (Rs5); industrial Rs1.40 (70 paisa); and open plots 90 paisa per square ft (70 paisa). For regularised Kacchi Abadis tax on commercial units will be Rs3 (Rs2) and for schools and hospitals new rate will be Rs5 (Rs2.50).

Representatives of trade and industry expressed resentment over the proposed increase in property tax rates. They said it would lead to increase in the cost of production and hurt exports which are already on decline.

Towel Manufacturers Association (TMA) Chairman Syed Muzammil Hussain said that the federal government was pursuing a policy to reduce the cost of business while the city government’s move would increase the cost of production.

Masroor Ahmed Alvi, chairman F.B. Area Association of Trade and Industry, said that the proposal violated the formula agreed with the government for levying property tax on factories. He said that the association was never consulted by the city government on the subject.

Gulshan Town Finance Officer Anis-ul-Hasan Zaidi told Dawn on Friday that the taxation committee of the town had suggested 100 per cent increase in tax rates following boom in property prices, but in view of the all round dearness the council had diluted the raise for residential and commercial units.

He said that the town council approved the resolution No 119 on July 25, 2006, which was circulated for comments from the general public and the business community. He claimed that the town administrations were empowered under the Sindh Local Government Ordinance to propose raise in tax rates in their areas.