Identification of Drawbacks of the Present System of Assessment and Collection of Holding Tax of Dhaka City Corporation

Abstract

The local administration like City Corporation plays a vital role to generate internal revenue sources, Most modern governments also use taxes to fund welfare and public services, But due to the lack of proper management system, the local level inslltutions can't collect taxes and others revenue regularly, The population of Dhaka City is increaSing at a high rate and urban authorities are forced to perform new functions, But the revenue sources are limited, "Holding Tax' is one of the priority sources of Dhaka City Corporation (DCC) revenue. It is a sum of the tax on the annual value of the buildings and lands, street lighting and conservancy rate, The City Corporation authority uses the income from the holding tax for the betterment of public services, legal supports for property owners, improvement of the economic structure, public works, social services and activities of the administrations itself, Although several studies are conducted on local municipal tax management in Bangladesh, but no extended study has so far been conducted considering causes and consequences of improper assessment of holding tax specially for Dhaka City Corporallon, The study made an attempt to investigate the drawbacks of assessment and collection of holding tax of DCC, For conducting the study both the qualitative and quantitative methods of data collection were applied, A household owner's survey was done on a sample of 500 holdings in order to find out the actual rental values, their payments records, their satisfaction on provided services and experience With corruption and so on, Interviews were also taken from the tax assessors, tax coilectors and other officials involved with holding tax management in the Dhaka City Corporation (DCC). Moreover, observation was a technique of data collection. This study revealed that current holding tax management systems of DCC is undervalued, complex for the tax payers and mixed up with corruption activities. Subjective approach of Individually holding assessment, irregular assessment, self defeating political interest, non transparent exercise, discretionary power of assessors as well as corrupt practices, delay in the assessment process, underassessment, over assessment, lack of monitoring, fraudulence, inefficient staff, lack of assessors, limited outdoor fee for assessors and other officials involved with continuous field visits in revenue department and less satisfaction of tax payers regarding DCC services specially conservancy, lighting and road condition are the drawbacks of assessment of holding tax. Political influence was also found as a very important factor for irregular holding tax assessment, On the other hand, some people are not habituated to pay th~eirtax regularly, though they are directly and indirectly paying more. Moreover, some of the influential persons are not agreed to give their tax, The authority cannot take proper initiative to collect tax from them because of their political and SOCialstrength, Favouritism and gift-culture among the actors and their network influence mismanagement during assessment and collection of holding tax, Moreover, low collection, manually holding tax management system and lack of supporting staff, fraudulence, lack of sallsfaction, lack of monitOring, opportunity of giving tax in zonal office and from home, only one bank for depositing money, inefficient staff, lim~ed outdoor fee for tax collectors are also the drawbacks of tax collection. Several problems related with the t~x base definition, as for example there was lack of computerized data base for record keeping and accounting, problems arise regarding tax mapping, property mapping etc and problems rose with proper documentation. Lack of awareness of the mass people regarding the existing laws and orders also creates space for illegal practice by the officials. After all, there is lack of transparency of the activ~ies of DCC to the holding tax payers. The holding tax management system should be improved immediateiy and promote good governance, There is also need to changes in assessment, collection, tax base and others organizational attributes of the holding tax management system, But eve~ change will be successful if general holdings owners are aware about their responsibilities and duties regarding holding tax management and concerned about the consequences of improper assessment.