LAHORE, May 15: The Punjab government is reluctantly considering to allow the tehsils or towns to assess and collect tax on immovable property under pressure from the World Bank which wants it to strictly follow the Punjab Local Government Ordinance 2001.

The amended ordinance provides that the tax shall be assessed and collected by the tehsil or town municipal administrations. But it has been assessed and collected by the provincial excise department on their behalf since the introduction of the local government system in 2002.

The district or city district governments play the role of an intermediary between the excise department and the teshil and town administrations.

According to the system, the excise and taxation department assesses and collects the property tax and then hands over the revenue to the district or city district governments after reportedly deducting its 15 per cent commission.

The district or city district governments then transfer the amount to the tehsil or town councils according to their share in the revenue again after deducting its 10 per cent share.

Interestingly, the district officers excise collecting the tax are under the district government’s EDOs revenue, establishing the dominance of the district governments in the entire system.

Official sources informed Dawn on Tuesday that the provincial government was not transferring the tax collection and assessment function because the existing system was suitable to it on different accounts.

But it had started considering the transfer under immense pressure from the World Bank, which was also going to organise a two-day seminar on the issue in near future.

They said the provincial government was most likely to succumb to the pressure despite its strong reservations.

When asked, they explained that the provincial government feared that the tehsil councils would not be able to properly assess and collect the tax mainly because of lack of capacity and human resource. And if at all they were able to perform the function, the assessment would be different in different tehsils, eroding the existing uniform assessment system. As a result, the ratio of the tax collection would be lowered.

They said the government also feared that the tehsil nazims having ulterior motives would harass their opponents with unrealistic assessments and help their favourites evade the tax.

This would also breed corruption in the tehsil councils through various means. The corrupt among the town or tehsil administrations could mint money from the owners of five-marla houses by issuing them the payment notices despite the fact they had been exempted from it by the provincial government, they said.