RAWALPINDI, Sept 18: Rawalpindi Cantonment Board (RCB) is set to raise substantially the property tax and water charges in the city areas it controls from next month.

Tax on commercial property will rise by 100 percent and on residential property by 30 percent while water charges will increase uniformly by 50 percent.

Provisional property tax demands for 2011-12 have meanwhile been issued at old rates to owners of commercial and residential units, with a 15 percent concession offered to those who pay the tax by September 30.

The new, higher rates will become effective from July 2011.

RCB Cantonment Executive Officer Rana Manzoor Ahmed Khan told Dawn that the RCB decided to increase the property tax to increase it annual income to be able to provide better civic facilities to the residents.

“People who have already paid their taxes for July-September 2011 at old rates will have to pay the difference according to new rates,” he said. Director Military Lands and Cantonment is likely to approve the new rates levied by the RCB within a few days. The property tax rates were last increased in the cantonment areas five years ago, he said.

Under the cantonment laws, the RCB can increase the property tax every three years. “RCB badly needed to increase its revenues and the property tax in the cantonment is main source of income for us,” Mr Khan said, adding that the RCB also planned to bring more people in tax net.

At present owners of 60,000 residential and 2,000 commercial units pay municipal taxes to RCB. The RCB collected Rs190 million in the property tax during the previous fiscal year and hoped to collect Rs400 million in the current 2011-12 fiscal year.

More than 70 percent owners of commercial properties do not pay their property tax regularly, according to the RCB executive officer. Rs1.6 billion are outstanding against them for last 10 years under the head.

RCB Cantonment Executive Officer said that the RCB justified the 50 percent increase in water charges by saying the RCB was facing financial problems and needed to bridge the gap between expenditure and earning.

He said the RCB collected only Rs70 million as water charges against the Rs220 million it spent on providing water to the residents of the cantonment areas. That was a huge difference and the RCB had no option but to increase the water rates, he said, announcing that water meters would be installed during the current fiscal year to charge residents according to the quantity they used.