Property Tax: Kashmir Inc Gears Up To Oppose ‘politically-motivated’ Move

Property Tax: Kashmir Inc Gears Up To Oppose ‘politically-motivated’ Move

18 August 2013
Greater Kashmir
Arif Shafi Wani

Srinagar: With the Jammu and Kashmir government setting stage for imposing property tax on commercial and residential properties, people are up in arms against the move, saying the ‘diktat’ is aimed at putting financial burden on the beleaguered people in the State. However, the authorities say it would take the stakeholders on board before finalizing the modalities for imposing the tax. The State Cabinet on August 16 cleared constitution of the Property Tax Board, paving way for imposition of property tax for the first time. The Board headed by a chairman has been envisaged to study property tax models in different states and come up with recommendations to the Government to assess and levy tax on properties coming under the purview of Urban and Local Bodies. Under the property tax law, it is proposed that up to 10 percent tax would be imposed on all commercial and four percent tax on residential properties falling within limits of Municipal Corporations of Srinagar and Jammu. In Municipal Committees, only commercial properties would be taxed up to three percent and in Municipal Councils commercial properties would be charged up to seven percent and tax on residential properties would be maximum of three percent. Noted economist Prof Nisar Ali said while levying property tax, the government among other factors should take into consideration huge financial losses suffered by the people during the past two decades. “I am not against the property tax but the government should not compare Jammu and Kashmir with other states like Delhi or Mumbai while fixing the rate of property tax,” he said. Ali said when National Conference (NC) government assumed power in 1996, he had proposed levying of nominal property tax in Urban housing. “At that time there was total financial crunch and to tap the loss, I had proposed a nominal rate of Rs 500 per annum for houses in Urban areas with plinth area up to 900 sq ft or less and Rs 1000 above 1000 sq ft,” he said. Quoting an official report, Prof Nisar said eight lakh households in the State evade payment of electricity fees due to high tariff. “There is a rule that the moment tariff or rate is high, evasion will be more. Similarly when tariff is low, evasion is less. I suggest to the concerned authorities to fix nominal property tax starting from Rs 1000 for up to 900 sq ft and Rs 2000 for above 1000 sq ft of plinth area respectively, for convenience of people,” he said. Prof Nisar also termed the creation of the State Property Tax Board as unwarranted and futile. “When there are already established institutions like municipal corporations and committees in place, the creation of the Board was not needed as it would put unnecessary financial burden on the state exchequer,” Prof Nisar added. In 2011 the Legislative Council referred JK Municipal (Amendment) Act 2000 and JK Municipal Corporation (Amendment) Act 2000 to Joint Select Committee after the amendments, which would empower the Corporations and Committees to impose tax, were passed by the Lower House. The bill for establishment of the Property Tax Board, which was also referred to the Committee, was recently passed by the Council. Reeling under burden of recession and other taxes, traders maintained that levying of property tax would be detrimental to their business. “Jammu and Kashmir is not a normal state. We are living and undertaking trade in a conflict zone. It is not justified to compare Jammu and Kashmir with other states. We are already reeling under a fresh spell of recession and levying of property taxes will hit our business badly. We have decided to oppose the move and we impress upon government to consider its decision,” said president of Kashmir Traders and Manufactures Federation Muhammad Yasin Khan. Kashmir hoteliers have also voiced their resentment against the property tax. “Levying of property tax will cripple the tourism industry which forms backbone of the state’s economy. Due to law and order situation since 1990 and particularly since 2008, tourism industry suffered massive loss. We are yet to recover from the loss and the levying of property tax would compound the problem,” Faiz Bakshi, President of Kashmir Hotel and Restaurant Owners Federation, said. Bakshi said the tourism industry provides employment to 3.5 lakh persons. “If we suffer additional financial burden we will have no option to limit our operations which can result in more unemployment and loss to allied sectors including transport, horticulture and handicrafts,” he said, adding the government should take all stakeholders on board before levying property tax. President, Kashmir Chamber of Commerce and Industries (KCCI) Abdul Hamid Punjabi termed the imposition of property tax as “premature” in the State. “This is not the right time to impose property tax as the state is yet to be developed on the pattern of other states. There is no concept of renting commercial or residential properties as is the case with other states. However, when the government has decided to go ahead with property tax imposition, they should patiently hear reservations or suggestions of all the stakeholders to prevent any conflict,” Punjabi said. Spokesperson of Kashmir Economic Alliance (KEA) Siraj Ahmad termed the move to levy tax on property as “politically motivated.” “Levying of property tax at a time when economy of the state is weak is nothing but a politically-motivated move to harass people. The diktat is aimed to put financial burden on beleaguered people. We have become a consumer and a dependent state. Every economic sector including mainstay of state’s economy, tourism and handicrafts, have suffered losses in the past over two decades. Levying of property tax will put huge financial burden on people. We will strongly oppose the move,” Siraj said. Siraj accused the government of failing to develop basic infrastructure in Kashmir. “Despite paying other taxes and tariff, authorities have failed to provide us with proper roads, electricity, potable water and other basic amenities. In this scenario, Government is not right in imposing property tax,” he added. Chairman of the newly constituted Property Tax Board, Jeet Lal Gupta said the body would take care of interests of general public and redress their apprehensions, if any. “We will implement the Property Tax Board Act in letter and spirit keeping in view instructions of the government as well as views of general public,” Gupta told Greater Kashmir.