The Communist Party of India (Marxist)-led Kerala government on Wednesday rolled back its proposal to impose additional tax on vacant houses and people who have more than one house after facing protest from the non-resident community, said state finance minister K N Balagopal.
Replying to a query during the budget discussion, the minister said it was only a proposal and the government won’t go ahead with it. “We understand reservations expressed by the expatriate community. We also received many petitions in this regard,” he said, adding, it was a proposal mooted by the local self government ministry. He said the government really appreciated contributions of expatriates and it never wanted to overburden them.
The minister denied reports that the decision was taken on the pressure of the real estate lobby. “It is not true. Many NRIs shared their concern with me. It will affect expatriates in lower income group, they told me. So we decided not to go ahead with it,” he said while replying to a question raised by Congress member Thiruvanchoor Radhakrishnan.
Many NRIs have welcomed the government decision. “We are happy that the government realised our concern,” said K V Sajith, settled in Bahrain. He owns two closed houses in north Malabar, one he inherited from his parents and another he built. “The government cannot kill the goose that lays golden eggs. Happy, the government finally understood its folly,” said another NRI Kurian Abraham.
Last week, HT had carried a detailed story in this connection, where several NRIs had complained that “it was a punishment for pumping in enough remittances to the state.”
They said the government’s proposal to impose additional tax on vacant houses was a rude jolt and it was unfair to tax NRIs who earn enough for the country.
In the state, the local bodies usually collect property tax in two instalments and owners of vacant houses can submit application to them after obtaining tax remission certificates based on the report of revenue inspectors and other officials. However, the cumbersome procedure forces many NRIs to remit property and building taxes.
But the proposal to impose an additional tax was difficult to digest for them. According to the local self government at least 11% of 10 million houses in the state are vacant, which is much higher than the national average of 7.45%.
And the cash-strapped government found an easy way to tap them. In the budget speech on February 3, Balagopal had said that the government was expecting ₹1000 crore from tax reforms and it will be a big boost to local bodies.
But people who supported the move said it was necessary to check the fragile environment and people who consider big houses as their status symbols should be penalised. “It would have a put a check on uncontrolled construction activities. Ground water level in the state is also dipping badly,” said green activist T V Prasad adding in many areas even agriculture lands were filled to build mansions.
