A move to increase holding taxes in Dhaka city after 27 years has been shelved by a ministry.
The two city corporations of Dhaka city had plans to create a uniform holding tax scheme. They even raised the taxes in some zones. Lofty goals were set for the 2016-17 fiscal year, DNCC looking to earn Tk500cr and DSCC Tk480cr in revenue, with the holding taxes playing a crucial role in it. But a letter from the Local Government Ministry has put the plans on hold.
According to officials from both Dhaka North City Corporation (DNCC) and Dhaka South City Corporation (DSCC), the Local Government Division (LGD) recently issued a letter asking all the city corporations to put their plans on hold for the time being. The letter says the LGD is waiting for legal opinions on the move before proceeding with it.
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The letter also says that the uniform tax holding scheme can only go ahead with the government’s permission. In the future, taxation will be automated for online payment. Until the entire process is automated, the tax increase has to be suspended.
DSCC Chief Revenue Officer Yusul Ali Sardar said: “We received a letter on November 12. So we are waiting for our legal counsel to comply with the ministry’s decision.”
DNCC Chief Execution Officer Khan Mohammad Bilal said: “The ministry told us to suspend the tax hike. We are working to implement their directive. Once the suspension is in effect, people can go back to paying taxes on the previous rate.”
Although holding tax rates are supposed to be re-adjusted every five years, they were never implemented for various reasons. The recent move for the tax rate adjustment came after 27 years, which saw four zones under the DNCC experience massive increases.
Many local homeowners’ associations strongly protested the increase, citing the sudden spike in taxes as a debilitating move.
Over the past 27 years, houses have doubled in height and increased rent, but not holding taxes.
The LGD took an initiative for holding tax readjustment in August 2016. The DSCC and DNCC each started work in two zones, but only the DNCC were able to successfully complete their task.
A number of DSCC tax supervisors were charged with taking bribes and other malpractices. On February 2 of this year, the Anti-Corruption Commission caught DSCC Deputy Tax Officer Tofazzal Hossain Jomaddar with dirty money from his home.
Earlier in January, a Dhaka resident by the name of Saif Alam filed a writ with the High Court which led to a suspension of the tax re-adjustment. But another court order overturned the suspension on August 7, prompting the work to proceed again.
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DNCC, after the completion of its first two zones, have started work on the other three zones. DSCC was set to issue letters to its zonal residents informing them of the tax hike, which has spread panic among homeowners.
This article was first published on Bangla Tribune