Rising inflation hampers property tax recovery in Rawalpindi

Rawalpindi: The Excise, Taxation and Narcotics Control Department in Rawalpindi district is facing significant challenges in meeting its property tax recovery targets, officials said, despite sealing 381 houses and property units since the Eid-ul-Fitr holidays.

The department is currently experiencing a 52 per cent shortfall in property tax collection, and with the last quarter of the fiscal year (April to June) approaching, achieving the set targets appears unlikely.

Excise and Taxation Director General Umar Sher Chattha has instructed all officers and staff to increase field operations to improve recovery rates.

Officials reported that property tax collection in inner-city areas and older commercial centres, including Raja Bazaar, Bara Bazaar, Dingi Khoi, Jamia Masjid Road, Kalan Bazaar, and City Saddar Road, has dropped significantly, with recovery rates between 30 to 33 per cent. In some areas, the shortfall has reached as high as 70 per cent.

Read: Property sale gains to be taxed under capital gains law: IHC

The decline has been attributed to rising inflation and reduced income levels among residents and businesses, which have made it increasingly difficult for taxpayers to meet their obligations.

A large number of residents have also challenged property tax notices in courts, contributing to delays in recovery. Newly issued tax bills, based on deputy commissioner area rates, are 20 to 30 per cent higher than last year, although rates in some commercial areas have decreased under revised valuations.

Residents in newer housing societies across Rawalpindi, as well as along GT Road, Kallar Syedan Road, and Daultala Main Road, have reported receiving property tax notices that they found unclear or inconsistent with previous bills.

Authorities said that addressing the financial constraints faced by taxpayers and improving public awareness of tax obligations will be key to enhancing recovery rates in the coming months.