Framework for a Strategy of UP Revenue/Resource Mobilisation ...

Most UPs appear to be using a cruder system. This involves assessing houses against some general
criteria: number of rooms, size of rooms, house construction materials, provision of tube well and
toilet. Typically, this results in assessment of Taka 10-20 for a one-room house of temporary
materials to Taka 150-250 for a four roomed house of permanent materials. The resulting
assessment may also be modified by assumptions about the occupier’s ability to pay. Overall, this
method of assessment may be acceptable, providing the criteria are clear and applied consistently
and transparently, for example, in a open budget meeting. In the end, what matters is not the
absolute value of the property but rather a fair distribution of the tax burden between households.
But it does require that a clear set of criteria is consistently applied and that the process is
sufficiently transparent.
Each UP is supposed to have a register of all houses 8 , together details of the property and the owner
or occupier and the assessed values. These lists were generally compiled more five years ago, and
are now due for revision (in one case, the register had not been revised since 1991). It was claimed
that adjustments are made each year for new houses or changes to houses. In the UPs visited, the
registers were said to have been compiled either using data from a survey conducted by students,
contracted by the UP and guided by the UP Secretary and councillors, or on a ward basis by UP
councillors themselves. In some cases, it was claimed, the registers and assessments were compiled
in public meetings. If that is so, it should ensure a degree of transparency and fairness. But there are
risks that only certain people attend such meetings, so that others are less fairly treated, although
given the very low levels of the assessments, a degree of unfairness may not be a major issue.
Where the ARV method is used, the tax rate has to be set (up to 7%) and applied. Where the
simpler system is used, the assessment comes directly to an amount per house, which may or may
not have any relationship to a rate of tax on the annual rental value. The tax rate, and the fixed
assessments, appears not to have been changed since the current tax rules came into effect in
2002/03, apart from where there have been changes to individual properties. In most cases, the
resulting tax assessments are very low: Taka 20 – 60 per year in most cases (equivalent to about US
30 – 80 cents), with some at Taka 100 or 200. 9 Exceptionally there are assessments of Taka 400 or
500. However, in the UPs in Gazipur, on the fringe of Dhaka, there were a number houses assessed
8 It is claimed that these registers are completed, but it is possible that some properties are not included, whether
because they are new or for some other reason.
9 As an indication of how low these tax assessments are, the typical assessment of Taka 20 – 60 corresponds to 0.15 –
0.4% of the annual minimum wage of a garment worker. In one UP that had not revised its assessments since 1991,
there were assessments of Taka 3 –5, amounts which are now too low to be collectable.
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