DSCC in cash crunch as entities default on holding tax payment

The Dhaka South City Corporation (DSCC) is in financial hardship since a number of major entities -- both government and private - have been defaulting on holding tax payment and revenue collection from other sources has turned out to be inadequate.
The corporation is finding it difficult to carry out its day-to-day activities due to resource constraint, officials say.
Besides, many private and non-profit organisations, individuals and market associations have filed cases against the city corporation in higher court that have led to the stuck-up of a good amount of revenue.
DSCC chief executive officer Ansar Ali Khan told the FE that the higher court has issued stay orders in response to writ petitions filed by different market associations on shop allotment by the corporation.  The corporation will not be able to collect its targeted revenue of Tk 1.0 billion as salami from the markets because of the stay orders.  
He said 50 per cent of the holding tax of this fiscal has been collected so far. But most of the taxes are generally realised at the last moment.
"I hope the overall revenue collection will be 80 per cent except for the market salami," he added.   
According to the officials, the total revenue collection may fall short by Tk 1.50 billion against the target of around Tk 5.59 billion set for the fiscal year (FY) 2013-14 of the city corporation due to poor collection of holding tax and non-realisation of revenue.
DSCC has set a target to collect Tk 2.70 billion as the holding tax in the FY 2013-14. In the revised budget for the last fiscal the amount of holding tax was Tk 1.70 billion.
DSCC collected a total of Tk 3.20 billion revenue in the FY 2012-13 against the target of Tk 4.59 billion putting the budget deficit at a staggering Tk 1.39 billion.  
According to a list of the major defaulters prepared by the city corporation, the amount of tax remained unrealised from 70 holdings that have not filed any case is more than Tk 212 million. In the zone one, a total of Tk 74.6 million has remained stuck up due to cases against the DSCC by various organisations and individuals.
Of the major defaulters as per the list of the DSCC, Tk 46.26 million is due with Bangladesh Railway, Tk 35.01 million with Holy Family Red Crescent Hospital, Tk 26.62 million with National Sports Council, Tk 13.66 million with SM Anisur Rahman, Tk 11.26 million with Rajuk (Rajdhani Unnayan Kartripakkha).
The major organisations and individuals under tax zone one that have filed cases are Ganashasthya Nagar Hospital  (Tk 17 million), Pir Yameni Market (Tk 28 million), Ananta Properties (Tk 13.3 million) and Hosne Ara (Tk 13 million).
In tax zone two, DSCC has holding tax worth Tk 26.5 million pending with 11 holdings due to legal complications. Of them major defaulters filing cases against DSCC are -- Overseas Traders Ltd for about Tk 10.5 million, Abu Obaida Tk 9.8 million and the rest amount with other individuals.
Relating to the present situation, chief revenue officer (CRO) of DSCC Mostafa Kamal said financially the south city corporation is under tremendous pressure as it has become difficult to pay the staff salaries, dues of the contractors and carry out various development activities.
The large amount of holding tax with major defaulters has remained pending for a long time which the corporation failed to realise due to various reasons.
 "This time we are in hard lines and using every means to realise the pending tax. We are doing it to achieve our revenue target as close as possible," he added.
He said the revenue issue was not considered when the city corporation was bifurcated. That's why most of the resourceful zones have fallen under the north city corporation.
There are 0.127 million holdings in the DSCC, 80 markets, 0.168 million trade licences, 405 bill boards, 16 cinema halls and six sub-registry offices. There are also a total of 52,728 rickshaws, 5,824 vans, 110 push carts and 14 horse carts in DSCC.