LAHORE: The Punjab government has got legal cover to impose property tax in rural union councils with urban characteristics -newly designated areas- across the province after the Punjab Assembly passed the Punjab Local Government (Fourth Amendment) Bill 2016 on Monday.

Under the amendment in Section 116 of Act XVIII of 2013, “If a Metropolitan Corporation, a Municipal Corporation, a Municipal Committee or a rural Union Council with urban characteristics has not determined the rate of property tax within its area, the property tax shall be levied in accordance with the provisions of the Punjab Urban Immovable Property Tax Act 1958 (Vof 1958).”

A source in the Punjab Excise and Taxation department told Dawn on Tuesday that the amendment had been made on the request of the department which was already collecting property tax from 210 defined rating areas of the province and was transferring the amount to the local government department through the finance department.

He said some of the rating areas fell under the jurisdiction of former metropolitan and municipal corporations, adding the department was expected to collect property tax from new rating areas from next fiscal year 2016-17 in order to collect more revenue.

The source said the entire property tax collected by the E&T department usually went to the LG department to foot the bill of salaries and other non-development allocations of existing local government set-up.

He said E&T department would work out modalities of the collection process after getting input of local councils’ representatives for deciding the rate of levy in future.

Punjab Finance Minister Dr Ayesha Ghuas Pasha said the property tax in rural UCs having urban characteristics would be applicable only after the third tier of governance (elected local councils) was made operational across the province in future.

On the other hand, opposition members in the Punjab Assembly have opposed the fourth amendment in LG Act, saying the collection might be diverted to mega projects instead of being utilized at the local level.

Published in Dawn, June 29th, 2016