Land registration fees, taxes to decline from Sept 01
Tuesday, 21 August 2007
Doulot Akter Mala
The government has recently taken a decision to reduce the fees and taxes levied at the time of land registration which the National Board of Revenue (NBR) has feared will cause substantial revenue losses.
In a recent inter-ministerial meeting on simplification of land registration procedure, Finance Adviser Mirza Azizul Islam announced the decision of the government to slash the taxes and expedite the registration and other related processes.
According to the government decision, the 5.0 per cent tax deductible at source at the time of registration will be totally waived.
Existing 5.0 per cent stamp duty for land registration in rural areas will be reduced to 2.0 per cent while the rate in urban areas will remain unchanged.
The finance adviser also instructed to lower the land registration fees to 2.0 per cent for both rural and urban area from existing 2.5 per cent.
The local government tax, which is currently calculated at 2.5 per cent and 2.0 per cent for urban and rural areas respectively, will be reduced to 2.0 per cent and 1.0 per cent respectively.
The decision is expected to come into effect from September 1 next.
Meanwhile, the finance ministry asked the NBR to issue a circular by this month-end, for enforcing the decision.
The NBR, however, feared that waiver of the tax at source would cause a shortfall of about Tk. 5.0 billion in revenue collection in the current fiscal.
The board is likely to request the finance ministry to drop the tax-waiver at source due to its possible adverse impact on tax collection.
The government will stand to lose Tk 1.45 billion (145 crore) tax revenue from Dhaka city alone if the decision is implemented, sources said.
Earlier, the Finance Adviser, who chaired the meeting, also underscored the need for eliminating land registration complexities.
Representatives from different ministries including those of land, law, justice and parliamentary affairs as well as the NBR attended the meeting.
He also directed the Internal Resources Division (IRD) to take necessary measures by August 30 in this connection.
The government has taken the decision, as the land registration cost of the country is relatively higher than that of the neighbouring countries due to imposition of different taxes and fees, a senior finance ministry official said quoting the finance adviser.
In order to check any adverse effect of the tax reduction, the value of land shown at the time registration of related transfer documents will be adjusted to conform to the existing market price, according to a meeting source.
The existing market prices of land are much higher than the values that are recorded at the time of registration in accordance with the government-fixed, location-wise notional prices. This is one of the major reasons for undisclosed income or expenditure related to transactions of those selling or buying land or immovable property, a competent source said.
In a recent review, it has been found that the land registration prices in the urban and rural areas are only 18.5 per cent and 14.5 per cent respectively of the actual market values thereof.
The finance adviser also asked the land ministry for preparing a circular by August 30 to reduce the time-frame for verifying land ownership from existing 15-60 days to 15 days.
Furthermore, the finance ministry directed the housing and public works ministry to reduce land ownership transferring time from existing 60 days to 30 days for government lands and related property. The ministry will also have to issue a circular by this month in this connection.
The ministry of law, justice and parliamentary affairs will issue a circular by this month reducing the time to obtain the original purchase certificates from the sub-registry offices.
The government has recently taken a decision to reduce the fees and taxes levied at the time of land registration which the National Board of Revenue (NBR) has feared will cause substantial revenue losses.
In a recent inter-ministerial meeting on simplification of land registration procedure, Finance Adviser Mirza Azizul Islam announced the decision of the government to slash the taxes and expedite the registration and other related processes.
According to the government decision, the 5.0 per cent tax deductible at source at the time of registration will be totally waived.
Existing 5.0 per cent stamp duty for land registration in rural areas will be reduced to 2.0 per cent while the rate in urban areas will remain unchanged.
The finance adviser also instructed to lower the land registration fees to 2.0 per cent for both rural and urban area from existing 2.5 per cent.
The local government tax, which is currently calculated at 2.5 per cent and 2.0 per cent for urban and rural areas respectively, will be reduced to 2.0 per cent and 1.0 per cent respectively.
The decision is expected to come into effect from September 1 next.
Meanwhile, the finance ministry asked the NBR to issue a circular by this month-end, for enforcing the decision.
The NBR, however, feared that waiver of the tax at source would cause a shortfall of about Tk. 5.0 billion in revenue collection in the current fiscal.
The board is likely to request the finance ministry to drop the tax-waiver at source due to its possible adverse impact on tax collection.
The government will stand to lose Tk 1.45 billion (145 crore) tax revenue from Dhaka city alone if the decision is implemented, sources said.
Earlier, the Finance Adviser, who chaired the meeting, also underscored the need for eliminating land registration complexities.
Representatives from different ministries including those of land, law, justice and parliamentary affairs as well as the NBR attended the meeting.
He also directed the Internal Resources Division (IRD) to take necessary measures by August 30 in this connection.
The government has taken the decision, as the land registration cost of the country is relatively higher than that of the neighbouring countries due to imposition of different taxes and fees, a senior finance ministry official said quoting the finance adviser.
In order to check any adverse effect of the tax reduction, the value of land shown at the time registration of related transfer documents will be adjusted to conform to the existing market price, according to a meeting source.
The existing market prices of land are much higher than the values that are recorded at the time of registration in accordance with the government-fixed, location-wise notional prices. This is one of the major reasons for undisclosed income or expenditure related to transactions of those selling or buying land or immovable property, a competent source said.
In a recent review, it has been found that the land registration prices in the urban and rural areas are only 18.5 per cent and 14.5 per cent respectively of the actual market values thereof.
The finance adviser also asked the land ministry for preparing a circular by August 30 to reduce the time-frame for verifying land ownership from existing 15-60 days to 15 days.
Furthermore, the finance ministry directed the housing and public works ministry to reduce land ownership transferring time from existing 60 days to 30 days for government lands and related property. The ministry will also have to issue a circular by this month in this connection.
The ministry of law, justice and parliamentary affairs will issue a circular by this month reducing the time to obtain the original purchase certificates from the sub-registry offices.