LAHORE, Dec 24: Following the Punjab government’s decision to consider further relief for widows and orphans, the Excise and Taxation Department has suggested exemption of a residential unit subject to a limit of annual rental valuation which may be raised from Rs27,000 to Rs48,600.

The summary, sent to the cabinet for a final decision, claims that exemption irrespective of valuation, would cost Rs72 million to the provincial government. Raising the exemption limit as proposed would cost Rs15.12 million.

Drawing on the history of tax exemption for widows and orphans in the province, the summary says that buildings and land belonging to widows, orphans and the disabled where annual rental value did not exceed Rs1,000 were exempted until June 30, 1982. From July 1, 1982, to June 30, 2000, the exemption was Rs12,000 besides a residential unit owned by widows, orphans and the disabled irrespective of area and valuation. If they owned more than one unit, the exemption applied to just one of the units.

During the 1999-2000, resource mobilization exercise, the government rationalized many taxes and levies. At that time the Excise and Taxation Department reduced the number of taxes from 22 to 8. In the light of recommendations of the PMDFC, an NGO of the World Bank, the exemption available to widows, orphans and the disabled was limited to an annual rental valuation of Rs21,600. Out of the 70,517 housing units exempted until then, 51,466 still remained exempt from property tax.

During the current financial year, the exemption was enhanced to Rs27,000. This cost Rs29.717 million to the government.