1,500 property owners owe KMC Rs 2b

KATHMANDU, Dec 4:

Owners of more than 1,500 big houses in Kathmandu Metropolitan City (KMC) evaded tax worth two billion rupees over the five-year period ending 2009/10, according to a fresh study.

The three-month study commissioned by KMC shows owners of 1,519 houses, covering more than 10,000 sq.ft each, evaded tax worth Rs 2.12 billion since 2004/05. “Only five percent of such property owners paid tax to KMC during the period.

Others evaded the tax,” Laxman Aryal, CEO of KMC, told Republica on Tuesday.

KMC collected around Rs 360 million in property tax in the last fiscal year. Officials of the only metropolitan city in the country estimate that five billion rupees can be raised annually through property tax.

As per the existing provision, owners of houses valued between Rs 1 million and Rs 2 million need to pay Rs 300 annually as property tax.

Similarly, property tax for houses with valuation between three to five million rupees has been set at 0.5 percent of total value.

Houses valued between Rs 5 to Rs 10 million are required to pay 0.75 percent of the total value as property tax. Likewise, property worth more than Rs 10 million needs to pay 1.5 percent of the total value as property tax.

According to Aryal, mainly big malls, large business houses, hotels and commercial complexes are among the big properties that have not paid property tax to KMC.

In a bid to encourage tax evaders to settle their dues in time, KMC has announced that it would not slap any penalty on dues cleared by mid-February.

“We are soon sending a list of owners of houses covering more than 10,000 sq.ft to our ward offices. Officials of ward offices will do the needful to recover the amount,” added Aryal.

Ward offices have the authority to assess tax worth up to Rs 100,000. They will have to consult with KMC for fixing higher amount of tax.

Aryal said KMC will act tough to recover tax dues from property owners.

To pile pressure on tax defaulters to clear their dues, he said KMC will start cutting off services like electricity and water supplies and stop garbage collection.

“We will also take action as per the existing laws,” he added.

Source: Republica