LAHORE: Approval of a Lahore Development Authority (LDA) proposal seeking increase in the fees on various services such as property transfer, NOC and map approval, and fines will have a debilitating effect on the people already facing financial stress due to inflation.

“It seems that the provincial government wants to further burden the masses by increasing the fees and penalties,” deplores a citizen. “The financial situation a common person is passing through has already become unbearable,” he says.

At a recent meeting presided over by the chief minister, the LDA governing body approved a proposal seeking rationalisation / increase in fees on several services (property transfer, NOC, map approval etc) and amounts of fines on various violations related to building regulations, illegal constructions etc.

According to the proposal, the LDA Act 1975 (as amended through an Act XXVI of 2013) empowers the authority to form its funds which shall vest in the Authority and shall be utilized in connection with its functions. Similarly under this Act, the fees, fines and penalties imposed is one of the major sources of funds to meet operational expenses of the Authority besides execution of the development projects and schemes.

The proposal explains that the rates of fees, fines and penalties were not revised by the LDA for the last eight years whereas the other government departments such as excise and taxation, and City District Government are collecting taxes/charges as per present value of the properties, which is increased on an annual basis.

“The operational / non-development expenses of the LDA have increased manifold owing to ever increasing inflation over a period of around eight years and specially after breakout of global pandemic of Covid-19 during the last two financial years. The authority, being self-sustainable organization, essentially needs revision on rates of fees, fines and penalties to maintain its sustainability,” it reads.

Previously, it claims that the fees, fines and penalties were approved on fixed rates. However, the LDA DG desired that a proposal for revision of rates be prepared after rationalisation in a way to minimize financial burden on the common citizens.

The proposal admits that during the process of rationalization and revision of rates in the past, it was noticed that fixed rates for all types of transactions regardless of value of property resulted in additional financial burden on low-income class and benefitted the well-off. It states that fixed rates for all types of transactions regardless of value of property resulted in reduced resource generation of the Authority.

It also led to inconsistency and non-uniformity with the other government departments who collect fees/taxes on the present value of property which are increased on an annual basis and limiting resource generation from commercial properties in land-related transactions due to fixed transaction rates.

The proposal further states that in some types of transactions, the fees were fixed for one scheme and not for other schemes. Moreover, the authority shared a massive financial burden by providing 50pc subsidy in the development charges for the plots to facilitate the general public for availing the low cost housing in Lahore city, for which revenue is essentially required from fees, fines and penalties to complete the infrastructure development of the scheme.

“In order to revise and rationalize the rates for fees, fines and penalties, the proposal suggests fixation of specific percentage of present value of property fixed in DC (district collector) valuation table for all major land related transactions of a property in analogy with the other state owned Government Departments. These rates will be applicable in all the operational/running/urbanized schemes of LDA. However, rates for several transactions are proposed as fixed rates for LDA City housing scheme owing to the reason that it is in development phase and 50% subsidy is provided to the allottees in the cost of development of infrastructure of the scheme,” it explains.

It claims that fixation of rates on the basis of value of property will decrease the financial burden on the owners of low valued property instead of payment of same charges for every property.

The proposal maintains that the rationalising the fees etc will increase LDA’s resource generation from the commercial properties as the proposed rates were claimed to be comparatively lower than the rates fixed by major private schemes. It further states that the revised rates will help authority generate revenue for bearing 50% cost for development of infrastructure of LDA City Housing Scheme and generation of additional revenue as the surplus funds will be used for the development of infrastructure of Lahore which will be compromised otherwise.

The services and enforcement related activities on which the fees, penalties etc have been increased massively (25 to 50pc and even 100pc in various cases) include property transfer, gift transfers, legal heirs transfer, placement of documents, copying, permission to mortgage, NOC, public notice for the general power of attorney, building period extension, possession, building plan approval, sub-division of plots, amalgamation of plots, extra height charges and all sorts of buildings’ completion certificates issuance fees and penalties on building construction rules violations.

“The government should either withdraw this decision or review it to reduce the fees with immediate effect,” demands another resident.

Published in Dawn, October 19th, 2022