Doing business in cities will be costlier as the authorities have planned to increase trade licence fees in city corporations from this month to collect more revenues for giving better services to city dwellers, local government officials said.
All businesses in 11 city corporations will come under the increased fees. The local government and rural development ministry has proposed increases two to five times the existing licence fees for various trade and service categories.
The upward revision is being made after 11 years to cope with the increasing administrative costs, officials said.
The 11 city corporations are: Dhaka North, Dhaka South, Chittagong, Khulna, Rajshahi, Barisal, Sylhet, Comilla, Narayanganj, Rangpur and Gazipur.
Md Yousuf Ali Sardar, Deputy Chief Revenue Officer of Dhaka South City Corporation (DSCC) told Dhaka Tribune, “Existing rules and terms for new business and renewal of trade licence were made in 2002. Different types of new business started in last ten years. For this reason, rules need to be updated.”
Deputy Chief Revenue Officer of Dhaka North City Corporation Mohammad Mohsin Ali told UNB that proposals were made for increasing fees and taxes in 61 new trades under Dhaka North City Corporation. Besides, a 15% tax has been proposed on signboard, cable operator/every dish connection.
Tk 15,500 has been proposed as new trade licence fee for scheduled banks and other financial institutions in all city corporations from Tk 3,000; while insurance companies (branch office) may have to give Tk 5,000 as licence fee (existing Tk 3,000); lending institutions (branch office) Tk 5,000 (existing Tk 3,000); and money changers Tk 5,000 (existing Tk 1,500).
For private universities (applicable to all city corporations), Tk 10,000 has been proposed as licence fee (existing Tk 2,000); and private colleges/schools (big) Tk 5,000 (existing Tk 1,000).
Licence fee for restaurants (air conditioned) has been proposed at Tk 5,000 (existing Tk 1,000) in Dhaka and Chittagong city corporations, while it is Tk 3,000 for other city corporations.
Restaurants (non-AC) in Dhaka and Chittagong cities may have to pay Tk 2,000 as licence fee instead of Tk 500, while the rate might be Tk 1000 for those in other city corporations .
For five-star hotels (centrally air conditioned), licence fee has been proposed at Tk 50,000 (existing Tk 20,000) in Dhaka and Chittagong cities, and Tk 25,000 for other city corporations.
For four-star hotels (centrally air conditioned), the rate might be Tk 25,000 in Dhaka and Chittagong, and Tk 20,000 in other cities.
Licence fee for centrally air conditioned three-star hotels may be raised to Tk 20,000 from Tk 15,000 now in Dhaka and Chittagong, while it is proposed at Tk 15,000 for other city corporations.
For two-star hotel (centrally air conditioned), the fee might be Tk 15,000 in Dhaka and Chittagong, while it is Tk 10,000 for other city corporations.
For one-star hotel (centrally air conditioned), licence fee might see an increase of Tk 2000 to Tk 12,000 in Dhaka and Chittagong cities. It might be Tk 8,000 for other city corporations.
Private health clinics and nursing homes of above 40-bed in all city corporations may see a 400% rise in licence fee--- from Tk 10,000 now to Tk 40,000.
The trade licence fee was raised last time on November 4, 2002 as per article 84 of the Local Government (City Corporation) Act-2009, a source at the LGRD Ministry told UNB.
The new fee will come into effect following the publication of New Model Tax Schedule-2013 in the official gazette.
According to the concerned section at the ministry, the licence fee will be more for some categories of trade in commercially important areas under only Dhaka North and Dhaka South and Chittagong City Corporations than the other city corporations.
In the model tax schedule, a new city tax has been imposed for those who will stay at a residential hotel in city corporation areas as elsewhere in the world. Separate 5% city tax is compulsory for every person who stays in a five-star hotel; 4% for four-star hotel; 3% for three-star hotel; and 2% for all other hotels.
Small shops under all the city corporations will also be brought under tax net for expanding the scope of tax.
LGRD secretary Abu Alam Mohammad Shahid Khan said: “Prices of everything have increased with the passage of time. Hence, it is necessary to increase the local government taxes. Disbursement of salaries and allowances of officials and employees of some city corporations was being hampered due to financial crisis.”