KARACHI: The Sindh government collected Rs1.375 billion in property tax during July-Feb 2016-17 compared to Rs1.31bn in the corresponding period last year.

Though the amount exceeds by Rs44 million than last year, it is much less than the desired recovery deemed necessary due to enforcement of tax in new rating areas.

A senior official of the Excise and Taxation Department attributed the shortfall in revenue to the slow progress in assessment of tax in new rating areas due to non-cooperation of the residents who have enjoyed tax free status for several decades.

Another reason for decline in the expected revenue is poor service delivery of tax challans to taxpayers due to old and faulty computer system.

The official admitted the delivery of challans covered only 60 to 65 per cent taxpayers.

Under the rule, the taxpayers must get tax challans in the first two months of every fiscal year but up to February about 35pc of the residents were still waiting for the tax challans.

The official claimed that more computerised challans have been issued this year compared to last year. The backlog is being cleared by issuing challans manually.

He said efforts are underway to switch on the modern optic fibre system to enhance fast generation and printing of challans.

The delay in delivery of property tax challans also prevented thousands of taxpayers from enjoying 5pc tax rebate on timely payment of tax.

Meanwhile, the excise department, after a vigorous campaign against the defaulters recovered Rs322.5m in tax arrears during the period under review compared toRs303m earlier.

In a bid to persuade chronic defaulters, the department has constituted seven teams which would visit the big defaulters owing millions of rupees tax arrears to clear their dues before June 30, 2017.

Responding to a question, a senior official of the Property Tax Directorate declined to reveal the names of big defaulters but said the list includes government departments, hospitals, schools, ports and commercial companies.

The department also recovered Rs24.2m in property tax from other sensitive areas like Sohrab Goth, New Karachi, North Karachi, Surjani Town, Gaddap and Baldia Town etc.

The Sindh government has proposed exemption from property tax in the new budget for owners of 120 square yard single storey houses inhabited by the owners. However the exemption has been withdrawn from multiple storey houses of same size used for commercial purposes.

The Sindh government is working slowly on a World Bank project for a province-wide survey of property units which would bring a large number of untaxed units in the tax net.

The survey, which was due to start in July 2017, has been delayed by the administrative problems in the finance department on the disbursement mode of the WB assistance.

Published in Dawn, April 2nd, 2017