LAHORE - As the Punjab Government is expecting Rs 280 billion income from provincial taxes, three new services have been included under the tax net besides levying property tax on vacant plots.

These services include services provided by cosmetic and plastic surgeons and hair transplant services and the services provided by warehouses and cold storages and related packaging and handling services.

The govt believes that inclusion of these new services will further broaden the tax base of Punjab sales tax and will be a continuation of the progress being made towards the eventual goal of a negative tariff list for Punjab sales tax. The govt intends to levy property tax on vacant plots in order to increase tax base of the property tax, check speculative trade of real estate and improve supply of housing by discouraging retention of vacant plots for long periods of time and to strengthen Local Government tax base.

The tax on vacant plots will be levied after two years of delivery of possession to the owner.  To provide less expensive entertainment to the lower strata of the society, entertainment duty is proposed to be withdrawn from petty entertainments such as well of death, swings and magic shows.

In the new proposed budget, the govt has imposed a tax on imported motor cars above 1300 CC. The rate of tax shall be different for different categories of motor cars.

The Government plans to amend the Stamp Act, 1999 so that the value of the property may be assessed according to the valuation table notified by the District Collectors under Section 27- A of said Act. This step has been taken to discourage purchasers to register Power of Attorneys instead of registering sale deeds.

To rationalize levy of taxes on power of attorney, the Stamp Duty at the rate of 2 per cent will continue to be levied but the Capital Value Tax (CVT) on “Power of Attorney” will be abolished. Currently the rate of CVT on Power of Attorney is Rs.100/- per square foot, which is creating hardship for the public due to heavy taxation.

Similarly, Article 63-A of Schedule-I of the Stamp Act,1899 meant for transfer of a right or interest relating to an immovable property is also being amended so that the assessment of the land may be made according to the valuation table. Presently, 3 per cent Stamp duty is being charged on the value of immovable property in case of transfer of a right or interest in housing societies. However, valuation tables notified by the District Collector under Section 27-A is not applicable on such transfers.

In order to remove ambiguity as to who shall pay the stamp duty at the time of execution of the instruments, another amendment is being made to include the Article Nos. i.e. 22-A, 27-A, 33 & 63-A of Schedule-I in section 29 of the Act.

At present, stamp duty at the rate of 3 per cent is being charged on the instrument of Power of Attorney if the same is executed for consideration but valuation tables are not applicable. Similarly, stamp duty of Rs 1200 per instrument is being charged when the Power of Attorney is executed for authorising the agent to sell the property.

But under the new arrangement, the same rate of stamp duty has been proposed if the Power of Attorney is executed for consideration but the value shall be calculated according to the valuation table notified by the District Collector concerned.

Moreover, the rate of Rs 1200/- has been proposed to be substituted at the rate of 2 per cent of the value of the property according to the valuation table if it is executed between persons other than spouses or between one wife or widow and another wife or widow of the same husband, or between father, mother, son, daughter, grandparents, grandchildren or siblings.