RAWALPINDI, Nov 2: The resource-constrained Rawal-pindi Cantonment Board has asked the defence ministry to abolish the property-tax exemptions, worth Rs30.5 million annually, given to the retired and serving army employees to help the Board in overcoming its budget deficit, highly-placed sources told Dawn.

Total property-tax exemption to retired armed services employees was granted by the present government from January 2001. Apart from tax exemption to the retired army people, the serving army personnel also enjoy a 60 per cent rebate. Full tax exemption is allowed to widows of government servants, sources said.

The source said that the financial troubles have forced the civic body to ask the defence ministry either to withdraw these exemptions in full or at least reduce them by 50 per cent to help the Board in overcoming its financial difficulties.

The Rawalpindi Canton-ment, being the seat of army headquarters, has the  highest concentration of retired army personnel, especially the senior army officials, many of whom own properties worth millions of rupees. These retired officers do not contribute towards the tax because of the exemption  given to them. Their burden is unwillingly shouldered by the civilians.

Many of the these retired army officers are re-appointed in the government, semi-government or private organizations but their properties   are on the basis of their being retired so they don’t pay a single penny to the resource-constrained Cantonment Board, sources said.

Reliable sources in the Board told Dawn that in order to overcome the financial constraints, the RCB is in the process of revising the property taxes for the civilian population of the cantonment area.

The civic body, it is learnt, is about to launch its triennial assessment of the annual rental value for 1999-2002 and has started issuing revised tax assessment to about 80,000 tax-units holders — 60,000  of whom are residential and the remaining commercial.

The tax-payers are concerned that the Cantonment Board might double their taxes in its new tax assessment to make up for the Rs30.5 million shortfall which it has to incur as a result of the property tax exemptions to the army employees.

A source said that this increase would be from the retrospective effect and the tax-payers would be asked to pay the arrears from 1999.

They said they have been regularly paying their property taxes every  year but this time, the civic body was not only doubling these taxes but also demanding arrears for the last two years.

“This is totally unjustified, extremely strange and out of proportion increase in the house tax and beyond our capacity to pay,” a jittery resident of cantonment area said.

Civilian residents in the area believe that they were being forced to shoulder the burden of the tax exemption given to the retired and serving army employees.

“We will have to pay double of what we used to pay previously,” a tax-payer said. “How is it possible for us to afford such a high increase in   one go?.”

Property tax is the Board’s main source of income but the tax exemption has landed the civic body in severe financial constraints.

The  RCB officials, however, claim that they have not increased the property taxes “but only rationalized them”.

They said that revised property tax notices are being sent to the property-owners, but, those having any objection on unproportional increase in their house-tax can file their objections, which will then be heard in a Board meeting in the presence of the complainants.