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KARACHI: The Sindh government has decided to devolve property tax collection to the local bodies, for which a proper database and capacity building of the relevant local bodies staff would be undertaken soon.

A decision was also made to undertake a survey of all buildings in the six district municipal corporations of Karachi; collect qualitative and quantitative data for each building, including property use, to collect the GPS co-ordinates for each building, including digital image, and to build upon the experiences from Sukkur and with participation from the excise and taxation department and the DMCs.

These decisions were taken by Chief Minister Syed Murad Ali Shah in a meeting he held with a World Bank team led by senior economist Yoonhee Kim at CM House on Thursday.

World Bank recommends a self-assessment and self-payment platform for taxpayers

During the meeting through a presentation the WB team said the current collection of property tax in Sindh is Rs2 billion while there was a potential for Rs7.2bn. Citing examples, the presentation said Punjab collected $88 million during 2015-16, Chennai $90m, Indian Hyderabad $179m, Bengaluru $201m and Mumbai $373m. “These figures are enough to assess how much Karachi in terms of its size and household can collect property tax,” said the WB representative.

The tax base has been eroded by virtue of very generous exemptions. Besides, the administration of property tax is based on ‘old’ system technology, current billing system is not fit for the tax collection, the WB said and recommended a self-assessment and self-payment platform for property tax customers, which “is need of the hour”. The property tax arrears constitute a major problem and significant loss of revenue.

The chief minister in his opening remarks said that he had already devolved property tax to the local bodies in Karachi but they had to develop a system for collection. He added that a property survey of Sukkur had been conducted.

Earlier, there were only 35,000 households registered for collection of property tax but the fresh survey has revealed an amazing figure of 65,000 houses fit for levy of property tax.

The WB suggested devolution of urban immovable property tax (UIPT) to local bodies, DMCs. But the chief minister was of the opinion that the local councils of Karachi — DMCs — in the absence of trained staff in property tax law and procedures, and lack of IT capabilities, do not yet have the capacity to administer UIPT collection functions.

However, he already had issued a directive to the local bodies to develop an efficient UIPT collection system.

It was agreed that immediate measures would be taken within the next three months. These measures include an agreement and legislation about UIPT devolution road map and institutional arrangement and survey preparations and their launch.

The WB also suggested phase-I (July 18 to June 2020) in which a survey would be completed with the preparation of a property tax database. Taxpayers services would be improved. Training and capacity building of DMCs staff identification, procurement, pilot deployment of ICT system for DMCs would be undertaken.

In phase-II (July 2020 to June 2023) there would be legal reforms, introduction of a self-assessment and self-payment system. The valuation methodology and updating valuation table would also be made and the exemption and relief system would also be reformed and the enforcement powers would be strengthened further.

The chief minister directed the excise department to identify and legislate changes needed to support a modern, ICT-based, revenue management system.

12 ambulances for Tharparkar hospitals

The Sindh chief minister on Thursday handed over 12 Toyota Hilux ambulances to Tharparkar district — two each for its six taluka headquarters hospitals.

Elected representatives of Thar received the ambulances at a ceremony held at CM House, which was attended by MNAs, senators, MPAs, chairmen of the taluka municipal committees and relevant officers.

Published in Dawn, March 16th, 2018