It is time to rethink land tax on 25 bighas

Over the past few days, I have spoken with Assistant Commissioners (Land), from different parts of the country about land mutation. They are exhausted and frustrated from dealing with the general public. Their assessment is that land administration is being run on the basis of flawed policies. Public suffering has become an everyday reality. In trying to manage the situation, the officials themselves are also struggling.

ACLand officials work at the grassroots level. They are the government’s frontline officials. Their work moves through different stages involving Additional Deputy Commissioners (Revenue) and Deputy Commissioners. In some cases, the Divisional Commissioner becomes involved, while in others the Land Appeal Board serves as the appellate authority. Policy decisions, however, fall under the jurisdiction of the Ministry of Land. I have also spoken with officials there about the dissatisfaction at the field level. Their views are equally surprising. They also agree with the frontline officials. Through years of reporting, I have become acquainted with officials at various levels of the Secretariat. They too agree with the views of officials at the field and mid-levels.

After independence, the country had to take some difficult decisions in the drive to build the nation. Some were driven by the demands of the time, while others were politically motivated. The exemption of land tax on up to 25 bighas of land was one such decision. This populist decision was taken by Bangabandhu Sheikh Mujibur Rahman. It was a political decision that was not examined through the bureaucratic channel. Yet the ideal practice is that a decision may be political, but it must go through scrutiny at the bureaucratic level.

Later, the government of Ziaur Rahman did not change the policy either. Why did the governments of Ershad, Khaleda Zia and Sheikh Hasina not change it? Because, ‘That will be very unpopular.’ Political opponents would exploit the issue and turn it into a political weapon. Ordinary people, without understanding its implications, would also say that the decision was against the public interest.

Yet land development tax is an extremely small or insignificant figure. It is a very small amount of money. The amount collected in land tax can be less than the rickshaw or auto fare required to travel to and from a land office. M. Saeeduzzaman, finance minister under the Ershad government, said land development tax was a ‘largely unexplored’ or underused source. He recommended exploring it. But he was stopped for fear that the move would make the government unpopular.

People avoid police stations. Simply put, they are afraid of police stations. People are also afraid of land offices. If they go there, a stroke of the pen could put a mark against their plot number.

When this decision was made after independence, it may have seemed that the tax burden had been lifted from the shoulders of ordinary people. But ACLand officials are saying something different today. Is collecting land tax only about collecting revenue? Or does it also have administrative importance?

Collecting land tax is not simply a matter of paying taxes. It is a process of keeping land ownership, possession and records active. When a landowner pays land tax every year, they have to visit the land office every year. In other words, they have to remain connected with the land office. This creates opportunities to update mutation records, land records and other information when necessary. But because land tax was exempted, millions of landowners no longer have any reason to visit land offices. This trouble-free silence, based on the idea that there is no land tax and therefore no hassle, has created a major problem today. Brokers, fraudsters and land grabbers have filled the vacuum left by landowners at land offices through various tactics.

Land tax is evidence of title and possession of land. Having paid land tax is also an important means among the various ways of proving ownership. A land record is a record of rights, while mutation is the process of notifying the change in ownership. But in the name of putting these services online, people are instead facing harassment.

People avoid police stations. Simply put, they are afraid of police stations. People are also afraid of land offices. If they go there, a stroke of the pen could put a mark against their plot number. If a landowner knows that they do not need to pay land tax, they will never feel the need to visit a land office.

Most landowners now have land registered in the names of their deceased fathers or grandfathers, and sometimes in the names of even earlier ancestors. Heirs think, who wants to go to the land office? Some people even develop a fever at the mere mention of a land office because they fear harassment, running from office to office and corruption. But this indifference does not last forever. At some point, people are forced to go there, especially when they need to sell land or when the government acquires their land. That is when they find themselves in deep trouble. They discover that the land is not even registered in their name. Although they may possess the land, the documents remain in someone else’s name. They then run from the union land office to the upazila, district and divisional city. Large amounts of money are spent on lawsuits and appeals.

When someone dies, the first step should be to notify the union office. But we do not do that because we do not understand its implications. How will a union office or land office know that the owner of a piece of land has died? When a landowner dies, the heirs naturally become the owners, and the sons and daughters do not feel the need to contact the land office because they face no problem with possession. The problem arises when ownership has to be transferred.

A person who owns 25 bighas of land is not poor. Those who own one acre or less than three bighas of land are the ones who are poor. If an owner of less than three bighas is considered poor, then what is the logic of keeping an owner of up to 25 bighas under the same tax exemption? Why should the tax benefit available to small landowners with less than three bighas also apply in the same way to those who own up to 25 bighas?

Therefore, 25 bighas is a substantial amount of land. There is no reason for the government to bear so much responsibility for owners of 25 bighas. They pay all kinds of other taxes. They pay electricity bills every month and pay VAT on processed products. If they can bear all these costs, why would they not be able to pay land tax of only a few hundred taka?

The issue is extremely sensitive. It requires a major political decision. But before taking such a decision, awareness must be created so that people do not misunderstand it. People have enjoyed not paying land tax for so long. If land tax is introduced again, it will interfere with that long standing benefit. Politically, therefore, the issue is extremely difficult.

Land offices are among the most corrupt institutions in the country. But there is no reason to mix up land tax with bribery. Exempting land tax does not stop bribery, just as increasing land tax does not automatically increase bribery. Corruption must be addressed through administrative accountability, transparency and technology.

Instead of a complete tax exemption, a nominal tax could be imposed. Taxes could be set in stages. A nominal amount could apply to up to five bighas, one rate could apply to up to 15 bighas and a slightly higher rate could apply to up to 25 bighas. The amount should be set at a level that would not put pressure on a household budget but would require the owner to pay land tax on their land every year.

The bigger issue than collecting a few hundred taka in revenue is ensuring that land records do not fall asleep along with the owner. If, in exchange for a small amount of money, people’s land documents remain accurate, their ownership remains secure and the relationship between citizens and the state is renewed every year through land, should we not take that opportunity?

Eighty percent of the country’s lawsuits are related to land. And the main reason behind this huge volume of litigation is mismanagement. The government’s responsibility is not simply to look at immediate popularity. It must also anticipate the dangers of the future. We have spent 55 years calculating popularity. Now it is time to get the land records right.

Author: Deputy Editor, Agamir Somoy