Syed Ishtiaque Reza
The government has decided to increase tax on both commercial and residential buildings under the city corporations. Holding tax, which was 12 per cent earlier, can now go up to 27 percent. This will apply for both flat and land owners. There is also a move to raise the trade licence fees. The government hopes that the income of the two Dhaka city corporations would increase by almost Tk 400 crore (Tk 4 billion) if the new tax rate is implemented. Other city corporations have also raised the holding tax in the respective areas. Home owners, both individual building or flat, in the capital are now punched by this sudden rise of holding tax. It seems the two city corporations in the metropolis are determined in raising tax rates on flats and houses. This is a surprise that holding tax, the main source of revenue of the city corporations, has not been adjusted for long. Home owners are paying tax at rates set decades ago. So this is logical that the city corporations have to go for upward adjustment of the rates.. But the question is whether it can be doubled suddenly? Moreover, there is allegation that houses or flats that were brought under survey and taxes levied five to eight years back are also being charged with taxes three to four times higher than the existing rates. As conscious dwellers of the metropolis we want to see that our city corporations are self dependent so that they can give us better services from their own funds. But we at the same time expect that city corporations will go for a calculated move instead of abruptly imposing something on the dwellers. The holding tax has been doubled at a time when the prices of essentials including rice soared like anything and reached beyond the capacity of common people. The rise in holding tax will lead to rise of house rents resulting in more economic pressure on the ordinary tenants. Holding tax is fixed after deducting rent of two months from the total income as maintenance cost and also deducting the annual interest of any loan taken or after deducting 40 per cent of the total rent if the owner is staying in any part of the property. If the decision of the new rates is implemented, a building owner will have to pay 27 per cent as tax. That means, a building owner has now to pay a total of Tk 27,000 as tax if s/he earns Tk 100,000 a year from his/her building. Earlier it was Tk 12,000. City dwellers have the right to ask about the services they get from the city corporations. Can they justify this hike when the corporations look at the amenities they provide? Certainly people want to pay, but reasonably. The new tax rate should be a justified one.
-The writer is a senior journalist.