The Punjab government has imposed a 16 per cent General Sales Tax (GST) on all rented properties across Rawalpindi district and the rest of the province, effective July 1, drawing strong reactions from citizens and property stakeholders. The new measure applies to all rented non-residential buildings and immovable properties throughout Punjab.
Key Features of the New Tax
Under the updated rules, taxpayers registered before January 1, 2025, will benefit from a 20 per cent cap on capital value assessment under the property tax system. Additionally, a 5 per cent discount is available for property tax payments made under the self-assessment scheme. The government has also introduced significant changes to Punjab's property tax system, including mandatory payment through the E-Pay Punjab electronic payment platform.
Penalties for Non-Payment
In case of non-payment, additional surcharges will be imposed every three months along with the original tax liability. The surcharge amount will increase annually on specific dates: October 31, January 31, April 30, and July 31. The tax will also apply to smaller houses rented out by owners, extending the levy to a broad range of rental properties.
Rejection by Stakeholders
Property Dealers Association representatives and citizens have rejected the levy, describing it as unjust. Association Secretary Naveed Ali stated, "The excise department was already collecting taxes on commercial and domestic rented properties, and the additional GST was unacceptable." Citizens Nasir Khan and Amjad Ali Shah expressed their dismay, saying the government was leaving no avenue untaxed and demanded immediate withdrawal of the measure. They argued that many pensioners purchase a house from their savings to generate rental income, and imposing GST on such properties was unfair.
Additional Revenue Measures
Alongside the GST on rented properties, the government has also increased token tax on commercial transport vehicles, including vans and trucks, as well as vehicles with engine capacities of 1,000cc and above, as part of broader efforts to boost revenue collection.
