LAHORE The cash-strapped Punjab government has decided to reduce the property tax from 25 to 10 per cent, while the rate of duty on horse races, and musical and fashion shows has been maintained.
However, exemption from entertainment duty, given anywhere in the province, will continue, and 65 per cent entertainment duty on chairlift in Murree has been completely withdrawn in the name of 'source of entertainment for the common man.
These decisions were taken at the provincial cabinet meeting, which was chaired by Chief Minister Shahbaz Sharif here on Saturday.
After the meeting, the CM observed that provision of recreational facilities to the masses was of vital importance in the present age of stress and tension, and the Punjab government was taking all possible measures in this regard.
He directed the secretary excise to send special teams to various places where chairlifts were operating for ensuring implementation of this decision in the interest of the people.
Reduction in the property tax by this huge margin is a continuation of a decision taken by the Punjab government on November 26 last year when it reduced the capital value tax rate on transfer of property in the Sunder Industrial Estate to two per cent of value from previous rate of Rs 100 per square yard, which was fixed by the federal government.
Reduction of property tax from 25 to 10 per cent is being considered as a step aimed at dishing out favour to the urban affluent of the province only.
Moreover, the adversaries of the PML-N government also believe that numerous transfer and registration deeds were pending because of the exorbitant government levy, and now these would be carried out smoothly.
Former Punjab finance minister Tanvir Ashraf Kaira considered it part of the PML-N election campaign.
He was of the view that for the last three years, the government had not imposed any tax, which was primarily because of the reason that it was seeing mid-term polls after six months, but the dream was never materialised.
There is a dire need to expand tax base since the government has failed in meeting its revenue targets, which were only 30 per cent and 25 per cent respectively during the first two fiscal years.
This has been so despite having set low targets, he observed, adding the provincial government had made no effort for increasing resources.
Even the luxury tax has been withdrawn.
Instead of going for collections, Punjab is shedding the options one by one.
It is certainly a step to favour the affluent since 5-marla houses have been already exempted from tax.
It is a glaring example of financial mismanagement, and the people are suffering because of it, he maintained.
This decision has further shrunk the tax collection options of the government as well since this has been done at a time when the country direly needs to increase its revenue options.
The PML-N is trying to appease its traditional urban vote back, while it did not raise eyebrows to the imposition of 17 per cent tax on agricultural inputs, which were imposed by the federal government, observed PML-Q MPA Muhammad Mohsin Khan Leghari, while mentioning that the resolution was passed by the Punjab Assembly instead of pressing the centre hard for withdrawing the tax.

This news was published in The Nation newspaper. Read complete newspaper of 10-Apr-2011 here.