23/6/2007

THIRUVANANTHAPURAM: The State Government has decided to revise building tax, shifting from annual rent-based to floor area- based calculation. The new rates would come into effect in this financial year.

Panchayats, Municipalities and Corporations will have different rates. The panchayats rates will vary from Rs. 3 to Rs. 8 a sq. mt., Municipality rates from Rs. 6 to Rs. 15 and Corporation rates Rs.8 to Rs. 20. But in the first phase, the Government has fixed the panchayat rate varying from Rs. 3 to Rs. 5 a sq mt., Municipality rates from Rs. 5 to Rs. 8 and corporation rates from Rs. 8 to Rs. 12, the Local Administration Minister Paloli Mohammed Kutty said in the Assembly on Friday.

Making a suo motu statement under Rule 300 of the House proceedings, Mr. Mohammed Kutty said tax rates were not revised at the mandatory five-year intervals since 1993 (when the Panchayat- Municipalities Acts came into force). He said huts, houses constructed under the EMS housing Project and beneficiaries of financial assistance from Fisheries, Scheduled Caste –Scheduled Tribes departments would be exempted from building tax along with houses with a floor area of 30 sq. mts. The process of preparing the tax rates after numbering of houses would take a year, he said. The Minister also said that a separate mechanism to address complaints would be set up. He said the building tax rates (property tax in towns) were based on a percentage of the value of annual rent. The rent was calculated as per the discretion of the officer concerned. This procedure had led to variations in the tax calculations and complaints in the absence of proper guidelines. The tax calculation procedures and the review mechanism had led to all round corruption, with the affluent and influential getting away with low rates.

The Minister said the loopholes for corruption can be plugged if there were proper guidelines for tax fixation. The decision to go in for floor area-based taxation had been taken as per the recommendation of the Sen Committee appointed by the previous LDF Government. Accordingly, Section 203 of the Panchayat Raj Act and Sections 234 and 235 of the Municipalities Act were amended in 1999. The Minister said the tax rates would be on the higher side as it would take into account opulence and size. The procedures had been made so simple that the house owner himself could calculate the rates.

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