The two Dhaka city corporations are having difficulty realizing holding tax – the tax imposed on buildings. Aside from citizens, a number of government institutions have failed to pay the tax for years.
Thirty-five ministries owe the Dhaka South City Corporation (DSCC) more than Tk60.5 crore. Sources say the two city corporations are yet to receive holding tax worth over Tk100 crore.
Some of the defaulters have blamed the negligence of officials of the city corporations’ concerned offices, claiming they would have paid up if the city corporations had issued reminders.
Experts say the government institutions were violating the law by not paying the tax.
Transparency International Bangladesh (TIB) Executive Director Iftekharuzzaman said it was clearly an irregularity on a massive scale.
“Everyone should pay holding tax, be it the general people or the government. The government should pay holding tax first to encourage the people,” he said. “The creditor organization should play the leading role. Why will the people pay holding tax if the government itself does not?”
“The government institutions are violating the law and policy by not paying holding tax.”
Information from five regional DSCC offices show that 35 government institutions owe the city corporation Tk603,186,971 as of the 2017-18 fiscal year.
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The Ministry of Finance owes the most, with Tk117,218,629 due from them. The Ministry of Housing and Public Works is in the second position, owing Tk99,697,125. They are followed by the Ministry of Youth and Sports, which owes Tk68,370,672.
Apart from them, the Ministry of Power, Energy and Mineral Resources owes Tk8,274,390; the LGRD Ministry Tk4,190,056; Ministry of Education Tk65,386,693; the Ministry of Primary and Mass Education Tk5,105,758; the Ministry of Road Transport and Bridges Tk3,548,880; the Ministry of Food Tk1,207,444; the Ministry of Health and Family Welfare over Tk5 crore; the Ministry of Law Tk1,842,914; the Ministry of Fisheries Tk535,230; the Ministry of Land Tk12,670,783; the Ministry of Shipping Tk4,237,759; The Ministry of Social Welfare Tk9,931,915; the Ministry of Posts and Telecommunications Tk5,776,970; the Ministry of Home Affairs Tk10,526,855; and The Ministry of Defence over Tk4.5 lakh.
The Ministry of Cultural Affairs has overdue holding tax amounting to Tk3,015,773; the Ministry of Religious Affairs Tk517,164; the Ministry of Science and Technology Tk291,207; the Ministry of Women and Children's Affairs Tk322,718; the Ministry of Information Tk7,478,566; the Ministry of Liberation War Affairs Tk20,595,019; the Ministry of Labour and Employment Tk880,983; the Ministry of Environment and Forests Tk41,587; the Ministry of Railways Tk27,297,731; the Ministry of Public Administration Tk2,909,294; the Ministry of Textiles and Jute Tk36,098,585; the Ministry of Planning Tk1,292,280; the Ministry of Commerce Tk5,198,042; the Ministry of Water Resources Tk5,062,899; the Ministry of Agriculture Tk10,179,230; and the Ministry of Civil Aviation and Tourism Tk10,301,450.
In total, 35 ministries currently owe the DSCC Tk60,31,86,971 for 1,186 holdings.
Many buildings of the ministries under Dhaka North City Corporation (DNCC) also have a large amount of overdue holding tax.
In the last fiscal year, the DNCC wrote to the ministries asking them to pay the overdue tax. Several ministries paid up, while some others have promised to do so within the current fiscal year.
Sources say the DNCC is updating the list of defaulters but has yet to send letters to the ministries.
Belal Hossain Mia, deputy chief revenue official at the DNCC, said they had sent letters to 35 ministries in the last fiscal year. “Some of them paid the tax after that. But there are still some other ministries who owe us holding tax,” he said.
“We have not finalized the list yet. We will prepare the list and send letters to them within a few days,” he added.
However, another revenue official said various institutions owe the DNCC nearly Tk50 crore and that the defaulters had been notified, but the city corporation was not able to realise the overdue tax as it did not maintain communication.
City corporation officials said they had taken various initiatives to increase income. The city corporation was taking action such as filing cases against house owners for not paying holding tax and preparing to take possession of their properties.
However, the initiative to realise overdue tax from the government institutions is limited to issuing letters.
The DSCC filed 1,741 cases against house owners who failed to pay holding tax in 2015 and 2016. This resulted in the recovery of Tk103,076,152 in holding tax and fines of Tk6,004,600.
Furthermore, There were allegations that the city corporations were hiking tax in the pretext of tax parity without even raising the quality of service. Although the people responded to the move, the government institutions remained quiet.
The city corporations could not take tough steps against the government bodies. Also, there are names of some influential ministers in the list, which is acting as a barrier to taking stern measures.
DSCC Chief Revenue Officer Yusuf Ali Sardar said they had prepared a list of defaulters and sent them letters. “Our higher authorities have contacted the [defaulting] institutions, but those institutions are not responding well,” he said.
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He added that it was not a new thing that government institutions had overdue holding tax.
“They paid the tax at various times. Many have only this year’s tax overdue. But there are some institutions that are yet to pay tax for five to seven years. We are trying to contact them,” Yusuf added.
However, the Ministry of Social Welfare, which has yet to pay Tk9,931,915 in holding tax, differed with him.
Khandoker Atiar Rahman, additional secretary (administration) of the ministry, said: “We have not received any such letter and no one contacted us. We will pay them tomorrow if they send us letter. How can we pay the city corporation if it does not issue a letter or bill against us?”
He said it was the same case with the Ministry of Power, Energy and Mineral Resources in the past. “But now they are realizing bills by issuing letters. There would not have been any overdue taxes if the city corporation did it too. We will give government money to the government with no objection,” he said.
There are allegations that top officials of the government bodies are unaware about the overdue holding and other taxes. In these cases, due importance is not given even if letters are sent seeking payment of the overdue tax.
Civil Aviation Minister Rashed Khan Menon said he was unaware that there was unpaid holding tax. “I will look into it,” he said, expressing indignation at the overdue holding tax of public institutions.
Additional Secretary (administration) Gopal Krishna Bhattacharya of the Ministry of Textiles and Jute said the Cabinet had ordered each ministry to pay dues, if they had any, to other government institutions by allocating funds.
He also said he was unaware of the amount of overdue tax. “We will pay up if there is overdue [holding tax] and if we have allocation of funds.”
This article was first published on Bangla Tribune