CDA proposes increase in property tax & water tariff

Islamabad: The federal cabinet is likely to take up a proposal from the Capital Development Authority (CDA) for increase in property tax and water charges with focus to target commercial consumers and owners of big houses for the fiscal year 2012-2013.

The CDA sources told ‘The News’ that the civic body had sent a proposal to the federal cabinet seeking 100% increase in property tax for commercial buildings and over 20% raise in the same for residential buildings.

However, there would be exemption in raise for owners of plots up to five marlas. The proposal also seeks 100% enhancement in water charges for all types of consumers in the federal capital.

It has been learnt that a summary in this connection was sent to the Cabinet Division in December and the cabinet secretary would give a briefing to the federal cabinet at the next meeting.

The property tax and water charges which were lowest in Islamabad as compared to rest of the country were raised 10 years back last time and since then there has been no revision in tariffs.

Justifying proposal of increase in water charges, a CDA official said that the cost

of water supply had multiplied many times in the last

10 years due to significant raise in electricity tariff during this period.

The revenue generation from property tax and water charges would cross the figure of Rs1.2 billion per year if the CDA’s proposal is accepted by the federal Cabinet.

The authority at present is well on the track to achieve target of revenue collection of Rs698 million for the ongoing year as so far it had collected Rs500 million in this head and expecting to receive another Rs160 million by the end of fiscal year 2011-2012. The property tax collected so far includes Rs170 million from commercial property and rest of the amount from residential and government buildings.

Similarly, the civic body had also collected Rs116 million from water charges and this amount would also be doubled by end of June.

The management of Capital Development Authority is already facing serious financial crunch and is finding ways to enhance its revenues to meet its day-to-day expenses and carry out development projects.

“Apart from making efforts to increase revenue, we have also received directives to further curtail non-development expenditures,” an official of the finance wing.

The authority’s financial problems increased in the last four years due to over 2,000 recruitments and upgradation of hundreds of employees, creation of new posts without generating more income resources.