Punjab government has decided to withdraw luxury vehicles tax in order to collect more revenue. The provincial Finance Minister, Tanvir Ashraf Kaira, observed the tax was planned to be levied on luxuries and the rich and the idea was to spend the revenue from this tax on the poor. “The imposition of luxury tax is causing loss to the provincial revenue since people registered their vehicles with other provinces and the Centre”.

It also reminds me that on 9^th June, 2010, Tariq Butt at The News wrote a very positive report titled Punjab collecting tax from the high and mighty. The report talked about how CM Shahbaz Sharif had paid tax on his luxury vehicles and also mentioned that “the provincial government has so far recovered Rs700 million against the target of Rs 800 million. The remainder will be recovered by June 30, 2010”. This raises the question that when nearly 87.5% of the target has been achieved and remaining is likely to be achieved then how can one call it a tax that was not practical? Strange isn’t it?

It is sad to note that on one hand the PML-N government tries to display a revolutionary approach to the public and media that they are in favor of the poor through items such as Sasti Roti scheme and on the other hand, a tax which is on luxury vehicles which was already in imposition has been removed from the targets of 2010-11. It would have been prudent had the provincial government replaced the Luxury Vehicles Tax with a road tax or charged a higher toll for vehicles which can be considered luxurious. At the same time, they could have demanded other provinces to increase the Luxury Vehicles Tax in their provinces so that tax arbitrage could end.

It unfortunately seems that the elitist culture in province prevails over everything else.

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