Date:19/11/2008 URL: http://www.thehindu.com/2008/11/19/stories/2008111956161000.htm

Karnataka - Bangalore

‘Ordinance has paved way for new method of property tax collection’

Staff Reporter

It has replaced Annual Rateable Value system, says forum

‘The Unit Area Value-based system is nothing but the much-opposed Capital Value System’
‘UAV is based on the expected rate of return from property system’

Bangalore: The Citizens’ Action Forum has alleged that the Ordinance brought out by the State Government for collection of property tax in the Bruhat Bangalore Mahanagara Palike (BBMP) areas has introduced a new method of calculating tax instead of retaining the Annual Rateable Value (ARV) as promised earlier.

Addressing presspersons here recently, forum president N.S. Mukunda said that the Ordinance issued by the Governor on October 25 had made “Unit Area Value (UAV)” as the base for determining the taxable value of the property and had given discretionary powers to the BBMP Commissioner to determine the UAV.

He also claimed the UAV-based property tax assessment was nothing but introduction of the much-opposed Capital Value System (CVS) in an indirect manner. While the CVS was based on capital value of the property based on market value published by the Government in the form of “guidance value,” the UAV was based on the “expected rate of return” from the property, he pointed out.

Ordinance says

According to the Ordinance, UAV meant “an average rate of expected returns from the property per sq ft per month determined on the basis of average market rate based on mass appraisal method or real estate market information or any other reliable source or combination of these sources that the commissioner may consider it as sufficient and reasonable having regard to the location, type of construction of the building, nature of use, area of the property, built-up area, age of the building and such other criteria as may be prescribed.”

“This action of the Government is a mockery of the promise made prior and after the elections and the Government is being misled by the bureaucracy. Implementation of the above tax proposal would cause hardship to the citizens, besides affecting the image of the Government about its promise made on retaining the ARV system,” he said.

The forum also demanded that the Government should hold a public hearing before framing laws, rules, schemes, etc., which would have a direct impact on the people. It also demanded a public hearing on the Akrama-Sakrama scheme before either amending the existing law or publishing the rules.