Property tax: consult all before taking it forward
BILAL HUSSAIN
The state government habitual of passing legislation without consulting stakeholders which otherwise should have been the priority has acted in similar manner with property tax legislations as well. The government should first have a wide publicity to the draft bill and sought suggestions from the general public.
The controversial bill concerning imposition of property tax —imposed by municipalities upon owners of real property within their jurisdiction based on the value of such property— in Jammu and Kashmir was finally referred to a Joint Select Committee in the Upper House following public outcry over the issue. The bills was aimed at amending J&K Municipal Act 2000 and J&K Municipal Corporation Act 2000 and establishing a Property Tax Board in the state which were already passed by the Legislative Assembly, amid stiff resistance by the opposition.
The Property Tax Board would look into the matters related to the property tax assessments in Urban Local bodies in J&K. The Board is supposed to enumerate all properties in municipalities in the state, develop database, review property tax system, recommend modalities, collect taxes, the Bill said.
The opposition political parties has termed the move as a tax regime that wants to extract money from the people in capital cities and towns. Also, most people in municipal areas believe that there should be uniform tax and it should not be based on the property.
While, valley’s apex chamber and industrial bodies, the Federation Chamber of Industries Kashmir and Kashmir Chamber of Commerce and Industry, too came down heavily on the government for passing a bill for introducing property tax in J&K. Both these apex bodies believe that people in the state are not able to pay routine taxes; paying property tax is far off a cry.
Taxing people for living in their own house that too at times of high inflation and economic downturn in Kashmir is noting but an anti-people move. To own a house in the valley is not luxury but a necessity in Kashmir, the government should realize it.
Although there is a need for financial strengthening of the local bodies in the state to ensure better civic facilities to general public, yet the present economic condition of the general masses didn't allow the government to go for such a legislation.
Instead of the property tax the government could levy taxes on number of service like water tax, drainage tax, conservancy (sanitation) tax, lighting tax, and many others. Going through other municipal experiences what I could sense is that by all accounts, the property tax is under-utilized in the municipalities and not effectively used in the panchayats, mainly due to tax payer resistance.
Like Brihanmumbai Municipal Corporation (BMC) which is lagging far behind when it comes to collecting property taxes. Despite property tax being amongst its major sources of tax collection, along with octroi. Over Rs 6,350 crore of property tax is outstanding in BMC’s accounts as of March 2010. The amount is a whopping 28 per cent of the BMC’s 2011-12 budget.
According to the new legislation, the state government will impose tax on commercial and residential properties across the state. While 10 percent tax will be levied on all commercial properties, 4 percent tax would be imposed on residential properties falling within the Municipal Corporations of Srinagar and Jammu. However, lands up to 10 marlas and residential construction thereon is exempted from tax.
In Municipal Committees only commercial properties will be charged tax with maximum ceiling up to 3 percent. The commercial properties in Municipal Councils will be charged up to 7 percent while residential properties up to maximum of 3 percent.
It is believed that the government earlier in compliance to the 13the Finance Commission recommendations, has introduced the bill to set up a Property Tax Board for valuation, revision and other matters related to the property tax.
The move is also seen as a means to meet the budgetary deficit of the state. The legislation to impose tax on properties is unethical and an anti-Kashmir move. “We oppose it tooth and nail and urge the state government to revoke it forthwith or else face action,” a senior members of the Kashmir Economic Alliance (KEA) —an amalgam of traders and industry bodies, at a press conference omn record has said. “It will cripple the already crippled economy of the state. The implementation of the legislation will not be in the interest people,” he added.
Sensing “regional discrimination” in the legislation, Siraj Ahmad who led the KEA said it is seen that in Jammu people own land of five to 10 Marlas “which has been exempted from tax.” “Therefore it is an anti-Kashmir legislation,” he said. “The Government wants to crush Kashmiris and their economy.”
What needs to be given a serious thought is that are Kashmiris in a position to pay the property tax? The economy of Jammu and Ladakh is better than that of Kashmir. Lakdah has income tax exception which should have been otherwise the case with Kashmir. It is not being against development of any region, but let there be equitable development for all the regions.
Among many other ramification that the legislation is expected to cast shadow on realty sector, which employees huge populace in the state. It would be irrational to go ahead with such a decision without discussing it with all the concerned stakeholders.
HIGHLIGHTS
* 10% property tax on commercial properties falling in Municipal Corporation limits of Srinagar and Jammu cities
* 4% tax on residential properties constructed on land area beyond 10 marlas in Municipal Corporations jurisdiction
* 7% tax on commercial properties falling in the jurisdiction of Municipal Councils
* 3% tax on residential properties in Municipal Councils jurisdiction beyond 12 marls of land
* 3% tax on commercial properties in Municipal Committees jurisdiction
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