Don't jump to conclusions on property taxes

The government should sit with all the stakeholders to discuss the planned property tax and study the experiences of other countries instead of jumping to conclusions, said Abdul Haque, a top business leader.
“The objectives will not be achieved by just imposing taxes on property. There are many other issues that have to be thoroughly discussed, evaluated and settled,” he said.
“This tax could be used to create national wealth, curb black money, protect land from grabbers and ensure the best use of scarce land.”
He said land reforms are a must for the government to successfully implement the planned property tax.
Haque fears if it is not used appropriately and if there is a drift away from its real objective, then it could be a tax burden on the taxpayers, which will discourage the obliging taxpayers.
He said the tax on the cards should be used to discipline the country's largely unregulated land market. “Otherwise, it will be of no benefit.”
The former president of Japan-Bangladesh Chamber of Commerce and Industry also said: “We have to formulate strategies where buying land will not be a profitable investment. Then people would investment in productive sectors.”
“Otherwise, it will be misused and pave the way for bribery,” said Haque, also a director of Federation of Bangladesh Chambers of Commerce and Industry (FBCCI).
The businessman said NBR should evaluate property tax policies in force in other countries to make the move more effective.
“There is no need to rush to it. We should make it as effective as possible.”
Haque is also aware of the need for such taxation. “Capital is rushing to land, in both urban and rural areas, in an absence of strategies to build national capital.”
“A large portion of people are losing land day-by-day as they are selling property off in view of making gains. On the other hand, it is creating unproductive investment. Inflationary effects are also there due to this sort of investment.”
“People are buying land but they are not using it. As a result, this type of investment is neither generating any employment nor contributing to creating wealth,” said Haque, also the managing director of Haq's Bay Automobiles.
He said there should be a thoughtful tax proposal in respect to acquiring land, possessing land, real estate and also inheriting land and property.
Haque urged NBR to study the experience of other countries so that the tax is not abused. “It has to be ensured that it is not a tool for extortion or corruption.”
“It cannot give a licence to government officials to extort money. If that is the case, it will not sustain.”
“Therefore, it should be thoroughly studied, carefully drafted, and implemented properly so that the objectives of creation of wealth is there and visible.”
He also said the proposed limit of Tk 50 lakh for exemption is nothing in the current market. “Today, a small flat costs Tk 50 lakh. I do not think it is thoughtful.”
He however did not suggest any figure.

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