200% Tax Hike in Islamabad Properties

Property owners in the capital have seen an unprecedented 200% hike in property tax with little time to pay the charges.

The Metropolitan Corporation Islamabad (MCI) approved the increase in property tax last December, making it applicable from July 1, but tensions between the MCI and Capital Development Authority (CDA) over who would control the revenue directorate responsible for collecting property tax meant that the distribution of property tax bills was delayed.

Bills that should have reached people in the first week of August were distributed last week, with Sept 30 listed as the due date.

Tug-of-war between MCI, CDA over control of revenue dept delayed tax notices, which were distributed around a week before the due date

The revenue directorate used to be a part of the CDA and was devolved to the MCI after the local government was forced in 2016.

The MCI revised property and water taxes, both of which were being deposited into CDA accounts because the bills were to be paid to the “directorate of revenue CDA”.

Sources said that both civic organisations have claimed their right to the directorate, because of which the concerned officials are uncertain about whether tax bills should be issued with the MCI’s logo or the CDA’s. After a considerable delay, they decided to go ahead with a CDA logo.

When it approved the revised property tax rate, the MCI said property taxes had not been revised for more than 18 years and an increase was therefore imperative.

However, residents said it was the authority’s fault if tax rates were not revised on time and not the fault of property owners now facing the 200% increase.

A resident of F-6 said: “This is ridiculous and nonsense. There is no justification for a hike of more than 200% whatever the reason. There should be a 10 to 20% increase.”

The situation has been exacerbated by the fact that tax notices were not delivered on time in August. Citizens said they were delivered a few days ago, directing citizens to pay their taxes no later than Sept 30.

“It seems the inner tussle between the CDA and the MCI to grab the civic powers of the capital territory resulted in the delay in the distribution of property tax bills. Bills that would otherwise have reached their destinations in August were distributed on Sept 21-22, leaving residents shocked at the raise on one hand and fearful of the deadline on the other,” a CDA official said.

Property owners Dawn spoke demanded that the MCI or CDA revise the rate and extend the deadline.

“This is totally unjust. We do not know who has the powers to decide the tax increase, but it is nothing less than a bombshell for residents who have to pay 200 times what they paid in property tax last year.

“I am surprised at the criteria being followed by the MCI. Such a significant increase in one go has left our budgets reeling. We are the salaried class, and have to maintain our monthly budgets accordingly. Now we have to look to our savings to pay the bills,” a G-10 resident said.

Rejecting the argument that the taxes were raised after 2001, he said: “This is not my fault. The MCI should have a system to follow when it comes to imposing or increasing such property taxes. Sadly they don’t have any. A sudden increase, and that too by a huge proportion, means the city is being run by amateur officials.”

He added that property owners who were previously paying Rs8,000 per year will now have to pay around Rs30,000.

An MCI official said the rates were revised after 18 years, which is “justified”. The official added that the tax is being collected by the CDA and not by the MCI.

CDA spokesperson Syed Safdar Ali said the federal government would decide how the taxes would be shared between the MCI and CDA.

Asked why the rate was increased by 200% and why notices were not distributed on time, he said: “The revision in rate was made by the MCI house so the CDA has nothing to do with it. As far as the late distribution is concerned with little time for payment, we will look into it.”

Source: FBR, Dawn


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