PESHAWAR: The Cantonment Board Peshawar overseen by the federal government hasn’t long paid the provincial government 15 per cent of the property tax collected in the areas under its administrative control.

The dues payable to the provincial excise and taxation department on this count since 2010 total Rs70 million, officials of the department told Dawn.

The officials said the department had repeatedly asked the CBP to pay arrears, but to no avail.

Taxation dept mulling imposition of fine on CBP, seizure of its assets

They insisted the CBP had no legal justification for the denial of payments.

Section 3 of the Presidential Order No 13 of 1979 states: “Fifteen per cent of the net proceeds of the tax referred to in Paragraph (b) of Clause (I), collected on or after the commencement of this Order, shall be paid by the cantonment board concerned to the provincial government.”

And the Paragraph (b) of Clause (I) of the Presidential Order states: “The cantonment board of a cantonment shall continue to levy---collect, in accordance with the provisions of the Cantonments Act 1924, the tax assessed on the annual value of buildings and lands.”

The officials said the KP government was duly paid the due share in the CBP property tax collections until 2009 but thereafter, the KP government struggled to get it.

“From 2010 to 2013, the CBP shared only information with the E&T department regarding the arrears under the head of property tax, which stood at around Rs30 million in 2013. However, it didn’t make any payment,” an official told Dawn.

The official said since 2013, the CBP didn’t ‘bother’ to inform the department about the increased arrears and that there was a likelihood of its arrears crossing the Rs70 million mark.

“We are in contact with the CBP for the payment of dues as the KP government is facing serious financial problems,” a senior official in E&T department said.

He however said the CBP was unwilling to pay arrears to his department’s frustration.

“We are seriously thinking about other options to claim dues, including imposition of fine on the CBP, and seizure of its movable properties,” he said.

The official said the department could impose 100 per cent penalty of the original payable tax amount on the CBP. When contacted, CBP chief executive officer Adil Rafi Siddiqi said prior to the issuance of the presidential order, the property tax was collected by the provincial government.

“At that time, the provincial government used to get 15 per cent of the property tax collected in the cantonment areas as collection charges with the rest going to the cantonment board,” he said.

Mr. Siddiqi said after the presidential order was issued, the responsibility of tax collection was shifted to the CBP but despite that, the presidential order allowed the provincial government to charge 15 per cent of the collected property tax.

“We are bound to act in line with the presidential order,” he said.

Appointed the CBP chief in June 2015, he said he had been in correspondence with E&T department director general Nasir Khan to develop a mechanism for payment of tax along with arrears in easy installments.

Published in Dawn, August 21st, 2016