The Department of Excise & Taxation, Punjab has decided to deal with the flaws in the tax collection system once and for all. In this regard, it is seeking property tax declarations from residents in the region, according to a news source.
The system is going to be revamped through a new reform, which is waiting for a final go ahead from the government. Once implemented, it would require tax filers to share accurate details of the property they own. The motive behind introducing this new reform is to bring more transparency to the existing tax collection mechanism.
Once the law passes, people in Punjab will be bound to provide written details of their property to the Excise and Taxation Department. If someone shares fake or incomplete details, he will be penalised with heavy fines.
To put things into perspective, people who share incorrect information will be fined as per a comprehensive set of terms that have been defined by the department. For example, if someone submits faulty details about their property they will be liable to pay not only the tax that they were originally supposed to pay, but also an additional amount as fine i.e. 50% of the original amount due. If this fine is not cleared with six months, the person will become liable to pay 100% of the original tax as fine.
The news report, which appears to be a press release, has also revealed that the upcoming budget for Punjab has no new tax impositions from the Excise & Taxation Department. Furthermore, the news report also reads that the exemptions given on property tax last year will be cut by 10% in the upcoming budget.
In addition to this, the report also says that the Excise & Taxation Department is looking to incorporate new reforms into the existing property taxes collection mechanism. Among these reforms, the compulsion on property owners to provide property tax declarations on an annual or bi-annual basis is the most prominent reform.
The step is reportedly being taken because of the rising number of instances where fake information has been shared by taxpayers about their property, so that they can avoid paying due taxes. The declaration form aims to ensure that taxpayers either share accurate information about their property or bear the consequences.
In the context of how the property market responded to the new tax collection regime that kicked in last year, many people are expecting big problems. However, this year’s budget will most likely not be as scary as the one we found last year. It does appear that the departments concerned are serious about collecting taxes – even if it means amending the laws, or introducing reforms.
Pakistan has a serious issue with taxation, with people coming up with new and improved approaches to evading them. With every passing year, methods to curb these detrimental practices are being introduced and improved – but we still have a long way to go.
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