KARACHI, June 30: The Sindh government has allowed administration of municipal towns to raise property tax by 50 per cent from July 1, 2007. Consequently Gulshan Town will be first the town to increase the tax in the new fiscal.

Observers of city affairs view it as the new financial year’s gift for Karachiites. Last two budgets were tax free.

Currently, the tax is collected by the Ministry of Excise and Taxation and its proceeds are transferred to the CDGK under the devolution of powers programme.

Sources at the finance department of Gulshan Town, which comprises of many new settlements of Gulshan-e-Iqbal and Gulistan-e-Jauhar apart from areas stretching to Scheme 33 along Super Highway, told Dawn that new property tax for the year 2007-08 would be issued with 50 per cent raise in the tax amount. The other municipal towns will follow suit after permission from the Sindh local government ministry.

The director of property tax of the ministry of excise and taxation was not available for comments on Saturday, but his secretariat staff denied of having any knowledge of the raise in tax rates. However, the director earlier in an informal chat with Dawn had disclosed that the property tax offices would be shifted to the premises of town offices and every town would have its tax unit. Such tax offices have already started working at Gulberg and Bin Qasim Town premises.

Gulshan Town finance officer Anis-ul-Hasan Zaidi told Dawn on Saturday that the town would now start issuing of property tax bills and collection of the same from this fiscal year, previously the job was done by the ministry of excise and taxation.

The property tax rate was raised after the Gulshan Town Council passed a resolution calling for hundred per cent raise in property tax rates on the plea that property prices in urban areas have increased steeply over the years, hence property tax rates needed to be revised.

Property dealers have termed the 50 per cent raise in property tax as unprecedented. They said that the raise, if necessary, should not have been more than 10 per cent.

The tax would further slacken the property business, which has already been witnessing a slump since the imposition of two per cent CVT on property transactions in the last budget.

Gulshan Town hopes to raise about Rs80 million in the new fiscal year through property tax. It collected Rs60 million from 1.5 per cent tax on property last year.

Nauman Siddiqui, a resident of Gulshan Iqbal condemned the move to raise property tax by 50 per cent by the city government. He said that the residents of the area were already deprived of basic civic amenities and the high rate of property tax would further multiply their financial woes.