LAHORE: The Federal Board of Revenue (FBR) has directed the Lahore Development Authority (LDA) to pay Rs73 million tax as assessed on the basis of its annual turnover for the fiscal year 2016-17.

However, the LDA has called the tax unjustified and decided to take up the matter with the Punjab government by sending a summary to the chief minister.

“The LDA has been taxed on the basis of its annual turnover, as FBR calls it turnover tax that is assessed irrespective of profit and loss. It sees us a corporate body or a company as defined in the Income Ordinance 2001. But our stance is that we, under the LDA Act 1975, are a government agency as well as a corporate body,” an official source told Dawn on Saturday.

Till 2009, development authorities such as LDA were exempted from tax under the ordinance. Later, the government amended the ordinance to include such entities as taxable firms. However, none of the authorities, including LDA, were served notices regarding payment of the tax assessed on the basis of annual turnover.

“We are surprised why the FBR is doing this since LDA and other development authorities in Punjab are neither profit-oriented organisations nor working as corporate bodies. The LDA is just working for service delivery in the form of various jobs, including launch of infrastructure development projects,” the source added.

He said the authority would soon challenge the tax notice with the commissioner (appeals).

“Through moving a summary to the provincial government, the LDA has requested the chief minister to take up the matter with the federal government with a request to amend the ordinance for exempting development authorities from such taxes,” he added.

Published in Dawn, October 14th, 2018