The report observes that these establishments are very irregular in paying their dues to utility service providers and default in paying land development tax as well. "It is high time that some stringent measures like postponing government grants and other supports [were] adopted to correct the behaviour of these institutions," it concludes.

Failure on the part of such institutions has brought down the overall rate of land development tax collection to less than 20 percent of the due amount of Tk 806 crores. That amount to 2.44 percent of the total revenue collected in fiscal year 2002-03, the commission says in its report submitted Tuesday.

The RRC observes that while individual holding-owners pay taxes satisfactorily, these institutions don't.

It also suggests hiking the land development tax through introduction of new categories.

Presently, an owner of up to 8.25 acres of agricultural land does not have to pay taxes. The RRC maintains that given the scarcity of land this tax waiver should be offered to owners of 2.5 acres of agricultural land or less.

The commission proposes to charge Tk 0.50 as tax for a decimal for agricultural holdings of over 2.5 acres up to 5.5 acres, Tk 1 for those over 5.5 acres up to 8.25 acres and Tk 1.5 for those over 8.25 acres.

"In a land-scarce country like Bangladesh, where land is a source of wealth and power in rural areas, there are good reasons for making land development tax progressive," the RRC reasons.

It proposes to raise the tax per decimal on commercial and industrial holdings in Dhaka, Narayanganj, Chittagong, Khulna and Rajshahi cities from Tk 125 to Tk 300. For residential holdings in those cities the proposed tax is Tk 60 per decimal.

The RRC favours charging Tk 20 and Tk 35 as tax per decimal for residential and commercial holdings respectively at district towns, instead of the present Tk 5 and Tk 22 respectively.

It also recommends introducing irrigation tax in the command areas of large irrigation projects like the Chandpur Irrigation Project, Muhuri Irrigation Project, DND Project, Meghna-Dhanagoda Project, Ganges-Kobadek Project and North Bengal Tubewell Irrigation Project. It proposes collecting 3 percent of the estimated value of incremental output of crops as irrigation tax in these areas.