Pakistan allows army to collect taxes in cantonment areas

The Pakistani government has allowed the country's army to collect taxes in cantonment areas as part of the 26th Constitutional Amendment.

A draft of the document states that in the Constitution's Fourth Schedule, the words "local taxes, fees, cess, charges, tolls in such areas" shall be added after the expression "cantonment areas", which means that authorities in those areas will now be able to collect local taxes, fees, cess, charges, and tolls.

A senior government official told Nukta that the federal government and cantonment boards did not have any competence, power and jurisdiction to levy, charge, impose and recover taxes on any immovable property, including tax on the annual rental value of immovable property, after the 18th Constitutional Amendment.

The Supreme Court, while hearing appeals related to property tax collection by cantonment boards, had in April this year ordered the Sindh government to enact a legislation to this effect within three months.

The apex court said in its order that the earlier interim relief granted by the Sindh High court will continue until the new law is devised.

According to the interim relief, the cantonment boards will charge urban immovable property tax at the rates prescribed under the Sindh Urban Immovable Property Tax Act 1958, but the recovery of previous amounts will remain suspended until final decision of the case.

Earlier, the cantonment boards had been discharging their functions and duties and collecting fees and taxes on the value of the buildings within their territorial limits. However, some residents of cantonments in Karachi had challenged the property tax before the provincial high court and stated that such taxes could not be imposed and collected by the cantonment boards.