DHAKA: The government is set to impose property tax on land, house and flat instead of surcharge on them from 2015-16FY in a bid to discourage people from buying land, house or flat in excess of their need and to reduce the wealth-gap.

National Board of Revenue (NBR) sources told banglanews that the NBR authorities have already started processes regarding the matter after directives from finance minister AMA Muhith.

NBR officials said several thousands crores of money will be realized as levy if this tax is imposed.

They further said surcharge or wealth tax is a kind of levy that people pay on the base-price of wealth. It was introduced in the then Pakistan in 1963 and continued after the independence.

However, it was withdrawn in 1997-98FY due to the pressure from lawmakers and wealthy people. Later, the surcharge was reintroduced in 2011-12FY.

The surcharge is usually imposed in four levels. Those who have more than Tk 2-crore but less than 10-crore need to pay 10 percent tax in addition to the fixed amount of tax. Those who have more than Tk 10-crore but less than 20-crore need to pay 15 percent.

Besides, those who have more than 20-crore but less than 30-crore have to pay 20 percent and those who have more than Tk 30-crore need to pay 25 percent extra tax.

However, due to shortcomings, NBR always failed to collect the tax, said the sources.

Calculations showed the number of people who have more than Tk 2-crore in the country is 10,152, though the real number is several hundred folds more, NBR sources said.

According to The Wealth Report-2015 by UK-based research farm Knight Frank, 78 persons in Bangladesh have a net wealth of more than Tk 250-crore though NBR does not have any authentic information in this regard.

NBR sources also said people from all the countries except Middle East are compelled to pay property tax. India was the first country in South Asia to introduce the system in 1957.

Wishing anonymity, a first secretary of tax division confirmed that NBR started working on property tax after the directions from finance minister.

The secretary also said, “We did not achieve expected level of success after imposing surcharge system due to shortcomings of existing legal system. This is why the government is going to impose property tax and enact a tougher law to realize it.”

Noted economist Dr Abul Barakat told banglanews that property tax should have been imposed earlier.

Former NBR chairman Abdul Aziz said, “Imposing property tax would have been unnecessary if we could achieve expected level of success in realizing surcharge”.

BDST: 1930 HRS, MAY 19, 2015
SR/RR/SMS