LAHORE, May, 6: Punjab’s property tax collection is 23 per cent short of the target during the first nine months of the current fiscal year, as most of the assessees wait for the court decision rather than paying tax.

The department collected Rs 1.183 billion against proportionate target of Rs 1.536 billion. The total target for the year stands at Rs 1.950 billion.

The department had issued notices in 74 out of total 117 rating areas and, of late, has started issuing arrest warrants of the defaulters under the Article 6 of the Property Tax Act, 1958.

After a Lahore High Court decision striking down rental based system, which was later upheld by the Supreme Court, the department prepared new valuation lists that were based on land and covered area of any building. Lists were duly displayed and objections invited. After the due process, the department issued tax notices to all assessees.

But some of them have moved the court on the grounds of valuation lists being too arbitrary to be true; local assessing officers have not taken proper care of the assessed property. The entire province has been assessed on the same formula and tax on rented commercial property has gone down whereas residential houses have come under heavy taxation. Now people prefer to wait for the decision rather than payment of tax in time.

Explaining the reasons, an officer of the department said: “People have just taken refuge behind the legal proceedings although they know they would not be exempted. Adjustments, if any, could be effected later on. Of course, the department will follow the court decision and revise, if needed, the table. But people must realize that legal fight is about nature of valuation, not the tax itself.

“But once the court clears, either way, people will quickly pay tax. Big businesses always pay their tax in the nick of time because they don’t want to waste dividends that this money could bring to them. So do the poor. Precisely for this reason, present shortfall is not a source of worry for the department. Collection always picks up during the last two months. But this time, legal wrangling has further slowed down it and it will pick up pace once the taxation is cleared from the court,” he said.