Andhra's new tax regime unaffordable: Former Union secretary

The proposed capital value system will force low-income households to make a distress sale of their property to a real estate developer, EAS Sarma said in a letter to the Chief Secretary.
Image for representational purpose. (File Photo)
Image for representational purpose. (File Photo)
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VISAKHAPATNAM:  Former union energy secretary EAS Sarma said the only rational and fair basis for determining the rate of property tax is to link it to the annual returns that a given property will potentially yield, not its imaginary value that the landowner may or may not derive in the rare event of selling the property at a future date. 

In a letter to chief secretary Adityanadh Das on Monday, EAS Sarma said the new tax regime will act unfairly against low-income households by making the tax unaffordable and eventually forcing the household to make a distress sale of it to a real estate developer. No one can justify the basis for property tax to be shifted from the present annual rental value (ARV) system to the proposed capital value (CV) system. He said the proposed shift in tax system will not stand judicial scrutiny.

He said though an elected body came into existence in GVMC, instead of taking back the matter to the elected body as required in Rule 6, the Commissioner chose to issue the draft notification directly, calling for objections from the public. This once again made a mockery of the idea of self-governance, he said.

He said the two waves of Covid have literally sapped the citizens of their incomes and crippled their economies. They are struggling to cope with the virus. In many cases, there was loss of life. At such a time, for the State government to rush through such a regressive change in the taxation system shows how insensitive it is to the feelings and the needs of the people. He appealed to the State government to revoke the regressive proposal forthwith.

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