LAHORE: The Punjab government, on Thursday, imposed new taxes in the budget 2011-12, including tax on farmhouses, elite clubs, swimming pools, duty on special classes of entertainment besides enhancing token taxes on vehicles with an engine capacity of 1,000cc or more.The Punjab Assembly (PA), in its ongoing budget session, on Thursday, passed the Finance Bill 2011-12 with a majority vote besides passing Lahore Ring Road Authority Bill 2011-12 and Food Authority Punjab Bill 2011-12. Amid charged atmosphere, the provincial government successfully secured approval of the imposition of new taxes.Pakistan People’s Party (PPP) favoured demands for grants while the Pakistan Muslim League-Quaid (PML-Q) voted in opposition. With the approval of the Finance Bill, the Punjab government has also decreased the rate of General Sales Tax (GST) from 17 percent to 16 percent (which is in line with the decision of the federal government) and entertainment duty from 65 percent to 20 percent.
Token tax on a 1,000-1,300 cc vehicle will be enhanced from Rs1, 200 to Rs1, 800 per annum, 1,300-1,500 cc vehicle Rs1, 800 to Rs 3, 000 per annum, 1,500-2,000 cc vehicle Rs 3,000 to Rs 4,500 per annum, 2,000-2,500 cc vehicle Rs 4, 500 to Rs 6, 000 per annum and 2,500 cc and above Rs 6, 000 to Rs10, 000 per annum.Moreover, a three-door 4×4 vehicle, with an engine power exceeding 2,500 cc, will be charged Rs 4,500 per annum. Token tax on a vehicle with engine capacity not exceeding 1,000c and vehicle with seating capacity of not more than three persons will remain at Rs 600 and Rs 500, respectively.According to the bill, owner of a house, spreading over 5,000 to 7,000 square feet, will have to pay tax at the rate of Rs 10 per square foot, owner of a farmhouse with 10,000 square feet covered area will have to pay Rs 15 per square foot tax; and above this Rs 20 per square foot tax.
It is to mention that currently, no property tax is collected from owners of the farmhouses. Elite Class Club Tax has initially been fixed at 10 percent of the membership fee, while another 10 percent tax will be collected on the services of these clubs.The bill also recommends imposition of water conservatory tax on swimming pools, except those in the educational institutions. The rate of token tax was revised in 2004, but now once again it has been revised and it is proposed to rationalize it with the current value due to inflation.The government proposes to levy Farm House Tax on which the bill states that there are palatial farmhouses built by affluent persons outside the urban rating areas.Presently, no property tax is being charged from the owners of these farmhouses.It is proposed to levy a fixed Farm House Tax on three categories of farmhouses (constructed after 1980) having minimum area of 4 kanals and with minimum covered area of 5,000 square feet.
Hence, it is proposed to recover tax from the owner or occupant of a farmhouse at the following rate:The bill also states that there are many elite clubs catering to the needs of affluent sections of the society.Members of these clubs have the capacity to levy cess for the provision of education to needy children.Thus, under this rationale, the government proposes to levy Education Cess on clubs, under which 10 percent cess would be levied on both initial membership fee and services rendered by these clubs. The government also proposes to levy duty on special classes of entertainments, such as horse racing, circus, fashion shows and musical shows.The rate of duty for admission to a horse racing will be 200 percent of the payment for admission or Rs 200 per admission ticket.
On circus, the rate of duty will be 20 percent of the payment for admission; provided that the government may, by notification, require the proprietor of the circus to pay the duty on annual fixation basis, on such terms and conditions as the government may determine.On fashion shows or musical shows, the rate of duty will be 65 percent of the payment for admission or 65 percent of the total amount paid to the owner or management of the premises or total expenditure made by organiser or sponsor, whichever is higher.The bill also proposes water conservancy charge on swimming pools with a minimum surface area of 250 square feet at the rate of Rs 60,000 per annum, except those in educational institutions. The government believes that this step would help in conserving water in the province.The session started at 11:55 am instead of its scheduled time at 10:00 hours with Speaker Rana Muhammad Iqbal Khan in the chair.Soon after the assembly’s business started, Law Minister Rana Sanaullah told the House details of an inquiry committee’s report on a dispute pertaining to Journalist Housing Colony. – Dailytimes