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The man behind Patna model of taxation
S.K. Singh
When Sunil Kumar Singh, an engineer turned IAS officer, took over as Administrator of Patna Municipal Corporation in 1995, he was shocked to discover that the assessment of holdings was not guided by any rules and regulations but was solely based on the discretion of assessment inspectors, big businessmen and traders.
Hoteliers particularly Marwaris in Patna city owning palatial buildings and godowns were paying Corporation taxes at a rate varying between Rs 2 and Rs. 4 annually while those who could not grease the hands of the assessing officers were being forced to pay exorbitant rates even though their holdings were much smaller and much more modest.
After assessing the 1/27th portion (posh and commercial areas) of the State Capital, Mr. Singh discovered that the taxation yield amounted to 50 per cent of Patna Municipal Corporation's total tax revenue. This prompted him to frame the new taxation rules based on low rate of taxation, a simplified tax structure, acceptability to the people and a taxation system free from the shackles of Inspector Raj.
The new area-based taxation criteria evolved by Mr. Singh were based on location of the holdings, type of construction and their use. The immediate result was that while the value of taxes of the Patna Municipal Corporation computed on the basis of the value of holdings came down immediately from 43.75 to nine per cent, the tax revenue went up more than 10 times.
``The new rules gave relief to the house-holders and though the Patna High Court quashed it, the Apex Court later upheld it describing it as a new system with all good intentions,'' says Mr. Singh, who is now director in the Central Ministry of Urban Affairs and Employment in New Delhi.
Such has been the efficacy of this model that the State Governments of Tamil Nadu and Uttar Pradesh have decided to implement it in their own states. And recently, this model has won the 2002 Dubai International Award for best practices to improve the living environment instituted by the UN Habitat six years back. "A simple yet effective approach to solve a long-standing problem shared by many municipalities of managing an equitable and non-performing tax collection system based on simplified assessment of property values by zones'' is how it describes the model in short.
``The Patna model of taxation has prompted the Union Government to issue guidelines to state governments in the country to encourage municipal bodies to apply area-based method in line with the new method,'' says Mr. Singh. "Even Parliament in its proceedings dated December 4, 2001, has lauded the model.''
By Kannan K.
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