ISLAMABAD, April 9: To improve the financial health of the capital’s civic body, the city managers have made another attempt to get municipal taxes increased, inside sources told Dawn on Monday.
The sources said they had again sent a proposal to the Cabinet Division seeking 40 to 80 per cent increase in property tax and 100 per cent hike in water charges and road tax (toll tax).
A similar attempt was made last year but the proposal could not get go-ahead from the Cabinet Division.
“We have again sent the proposal to the Cabinet Division seeking its approval for the proposed increase in property and road tax and water charges,” Capital Development Authority’s (CDA) Director Revenue, Fazl-e-Mabood told Dawn.
He said the CDA would give a presentation on the proposed increased in local taxes to Cabinet Secretary Nargis Sethi and other senior officials within a week.
Last year, the authority had proposed 100 per cent hike in property tax but the Cabinet Division did not give its approval and directed the CDA bosses to keep it between 40 to 80 per cent.
Under the new proposal, the owner of a house constructed on 320 square yards (40×80 feet) will have to pay Rs26,000 as annual property tax instead of the current Rs15,000.
If the proposal is implemented, it will be another bombshell for the residents of Islamabad after hike in the price of consumer items, electricity and fuel.
“The owners of small houses (measuring 320 sq yards and below) will not be affected and additional property tax will be charged only from those who have big houses (measuring 500 sq yards and above),” the CDA director said.
Similarly, the car drivers will have to pay Rs10 as toll tax instead of Rs5 at three toll collections points in Islamabad—I J Principal Road, Golra and Rawat. For heavy traffic vehicles it will be Rs45 instead of Rs25.
Property tax was increased last time in late 90s when people did not accept it and a number of residents moved courts to get relief but the decision was given in favour of the CDA.
It is expected that people will again reject the fresh increase and there will be hue and cry in the city on the issue.
However, the official of the CDA claimed that even after the fresh revision the property tax in Islamabad would still be lower than what being paid by the citizens of Lahore and Karachi.
On the other hand some senior citizens rejected proposed raise in municipal taxes.
“Earlier, when Islamabad came into existence, its residents were exempted from local taxes to encourage more and more people to build their houses in the then deserted city,” said a senior citizen Ashraf Hussain.
Another resident Riaz Khan said any increase in local taxes would earn a bad name for the PPP-led government especially when it had entered into the election year.
Property tax in Islamabad, under which the CDA generates about Rs1 billion, was first levied in late 90s.
The CDA collects around Rs2 billion total municipal taxes every year under different heads while its total budget for the year 2011-2012 was Rs24 billion including Rs6 billion non-development expenditure.