Abstract:
Holding tax has been the focus of revenue reforms in most urban local bodies as it is
one of the significant sources of revenue. But the potential of this source is seriously
under utilized due to weakness in both assessment and administrative process. The
traditional holding tax assessment system lacked transparency and objectivity. There
are many reasons for it. One of the reasons often cited is existing assessment system is
too complex and often subjective. There is a great scope for urban local government
bodies to enhance their own revenue collection by making proper assessment of
holding taxes. Although several studies are conducted on local municipal tax in
Bangladesh, but no extended study has so far been conducted considering
comparative analysis of holding tax assessment method. This research work has
focused on comparing three methods namely Annual Rental Value, Capital value
system and Unit Area Method for assessing holding tax. For assessment purposes 6
no. ward of Joypurhat Pourashava has been taken as a case study. About 452 holdings
were considered for assessment under the three methods. These three methods have
their own factors for assessing tax. However for simplicity as well as for practical
convenience only common factors were considered. The common factors for all these
assessment methods are: location factor, structure factor, occupancy factor, age factor
and plinth area. The assessment result showed that tax from holding is more in unit
area method than capital value system and annual rental value method. It has also
found in the study area that political influence is also important factor for irregular
holding tax assessment and poor collection. The existing system is not transparent.
Depending on the comparative advantage and tax evaluation the research used six
criteria to compare the suitability of the method. Most suitable method has been
identified from the suitability analysis to determine the holding tax in the urban areas
of Bangladesh. It is hoped that the new assessment method will reduce the problems
of under assessment and corruption.
