House owners are fearing harassment and various types of hassles following the ongoing process of reassessment of holding tax by Dhaka north and south city corporations.
There are also differences between the reassessment procedures followed by two city corporations.
House owners are highly critical of the reassessment that is likely to lead to the hike in holding tax. Tenants will also be affected, they said.
But city corporation officials claim that there is misunderstanding about the whole process.
Talking to the FE, Dhaka North City Corporation (DNCC) chief revenue officer Rabindra Sri Barua said there is a rate chart on per square feet rent fixed in 2008. It was fixed as per the location, development condition and overall situation. Reassessment is going on and the holding tax will not increase for those who have been paying it as per the 2008 rate, he added.
"There is no scope of irregularities for which the rent can be less or more. We have eliminated the scope of officials becoming whimsical as they have to follow the rate chart," he claimed.
There are five zones in DNCC where there are 0.22 million holdings. Now reassessment is going on in zones 2, 4 and 5 but we cannot say when the whole process will be completed as the officials are now collecting field level data, Mr Rabindra said. The target of holding tax earnings for this fiscal year has been set at Tk 4.85 billion.
He also said holding tax may increase between 150 per cent and 200 per cent. But in few cases, it will increase drastically. For example, one house owner was paying the tax of a three-storey building, but, in the meanwhile, he or she has added a few more stories.
Besides, many house owners have turned their buildings into commercial ones or have been running shops or other business units in the building but paying holding tax at the rate applicable to residential buildings.
There is no reason for gross increase in house rent and illogical increase in holding tax, he assured.
Faizur Rahman has a six-storey house in Mirpur 11 which falls under zone 2. He lives in another area renting out the house. A DNCC official went to his house and asked one of the tenants the rent of 1st floor which was Tk 20,000. He sent a letter fixing holding tax mentioning rent for all the flats as Tk 20,000 although the rent of the 5th floor flat was Tk 12,000. Mr Faiz used to pay Tk 24,000 as holding tax which has now increased to Tk 36,000.
When Mr Faiz asked about the anomalies, the official acknowledged his mistake and found another reason to harass him. The DNCC official then said why he didn't mention that his bank loan was paid in early 2000 and all his outstanding tax was collected from Mr Faiz.
Dhaka South City Corporation (DSCC) Chief Revenue Officer Yousuf Ali Sarder, however, said the 2008 rate chart is just a guideline for possible rent. It's an internal arrangement of the corporation.
There are huge discrepancies between an old house owner and a new house owner. The last general assessment was done in 1989. The holding tax will remain 12 per cent of the 10-month rent. The amount of holding tax will increase as the rent has increased in last 26 years during when the city corporation did not revise the holding tax in every five years.
"We have prepared a new guideline after conducting survey in 2016. The rent has been fixed 20 per cent less than the real rent of 2016-17," he said.
"The house rent will rather decrease instead of increase because we have already fixed 20 per cent less rent. Besides, there are scopes for two-step appeal -- one to the city corporation and another to divisional commission board," he said.
The DSCC has already completed reassessment in zone 1 and 2 where there are 85,000 holdings. Reassessment is going on in another zone and two are pending where there are another 80,000 holdings. It will complete the reassessment process by January next year.
The target of DSCC's revenue earnings from holding tax in the current fiscal year is Tk 5.15 billion which was Tk 2.85 billion in the last fiscal year, said Mr Yousuf.
He said DSCC could earn only Tk 1.95 billion last fiscal due to three cases. All the judgements were in favour of DSCC. This year 100 per cent revenue target from holding tax will be achieved, Mr Yousuf expressed the hope. He said there is no debate over the hike of holding tax rather it is misconception.
When contacted, Mr Riaz, a resident of Dhanmondi, said increase in the holding tax is inhuman as he will have now to pay three times more holding tax against the amount he was paying all these years. He suggested increasing it proportionately and phase by phase to avoid pressure on the citizens. Otherwise he has to pass on the increased amount to the tenants.
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