Union Council (Tax Schedule) Rules, 2012
Tax List for the Respected Holding Owners of Ward No. 1, SBK Union

In the administrative and rural local government structure of Bangladesh, the Union Parishad is the lowest tier and a vital local government institution. Despite being at the grassroots level, the Union Parishad is continuously engaged in efforts for the socio-economic development of rural populations. It serves as a recognized medium for planning and implementing development initiatives at the local level. Just as sound financial management is impossible without efficient local administration, similarly, strong local administration cannot be achieved without sound financial management. Therefore, the administration and financial management of Union Parishads are intricately linked.

To facilitate the payment of Chowkidars (village watchmen) through the collection of taxes, the Village Chowkidars Act was passed in 1870. As a result, for the first time, local government institutions were legally established in rural areas. After the repeal or amendment of the Bengal Local Self-Government Act of 1885, the Union Parishad was renamed under Presidential Order No. 22 of 1973. Later, the structure and sources of income for Union Parishads were further modified through the Local Government (Union Parishad) Ordinance of 1983.

According to Section 43 of the Local Government (Union Parishad) Ordinance, 1983, a fund called the "Union Fund" must be created for each Union Parishad, and under Sub-section 1 of the same section, all funds received from various sources are to be deposited into this fund. The income sources for Union Parishads are primarily threefold: revenue income, government grants, and other sources.

Under the Local Government (Union Parishad) Ordinance, 1983, the Amendment Act of 1993, and executive orders of the government, Union Parishads have been empowered to impose and collect taxes, rates, and fees on six types of subjects:

(a) Tax on the annual value of houses or Union rates (commonly known as holding tax), which is the primary source of revenue income for Union Parishads.

(b) Tax on professions, trades, and callings.

(c) Entertainment tax on cinema, drama, theater performances, and similar entertainments.

(d) Fees for licenses and permits approved by the Parishad.

(e) Fees (lease money) from markets and ferries established by the government within the Union's boundaries.

Imposition and Collection of Taxes: According to Section 53 of the Local Government (Union Parishad) Ordinance, 1983, Union Parishads can impose and collect taxes with the approval of the Deputy Commissioner. The government may also formulate a model tax schedule, and Union Parishads must impose taxes, rates, and fees according to that schedule. To impose a tax on the annual value of houses, Union Parishads must prepare a tax assessment list every five years. An assessor appointed by the Union Parishad will prepare this list with the approval of the Deputy Commissioner. Any objections to the assessment must be settled according to the rules. After approval by a special meeting of the Union Parishad, the list must be submitted to the Deputy Commissioner for final approval. The tax on the annual value of houses must not exceed seven percent.

Tax Collection Procedures:

The Union Parishad will arrange the collection of taxes, rates, and fees.

The Union Parishad will inform the public through notices about who will collect taxes, rates, and fees, where, and at what time. Notices can also be posted on the Union Parishad’s notice board or at important places.

Taxpayers can pay at the Union Parishad office or to an authorized person or at a designated bank. The Union Parishad must issue an official receipt (UP Form No. 10) with the signatures of both the Chairman and the collector, mentioning the amount paid and outstanding dues. If payment is made through the bank, a bank receipt will be provided.

According to Rule 10, the Union Parishad will send quarterly bills stating the due date for payment. A 5% rebate is allowed if the full amount is paid within the stipulated time.

Due to hardship or any inconvenience, the Union Parishad may defer the collection of taxes, rates, and fees for a maximum of six months.

If convinced that a taxpayer is distressed, the Union Parishad may reduce the imposed amount by up to 15%. If further reduction beyond 15% is necessary, it must seek approval from the Deputy Commissioner after the taxpayer pays the reduced amount.

According to Rule 12, if a person fails to pay within the designated time, a list of defaulters will be prepared and posted publicly. After 15 days, the Union Parishad may recover the dues through government claims, land revenue, seizure notices, or sale of movable properties. The Chairman will issue the seizure warrant, and it will be executed by the Chairman or an authorized employee.

According to Rule 18, the Union Parishad may abstain from collecting taxes that are deemed irrecoverable.

Besides carrying out ten mandatory and thirty-eight optional responsibilities, Union Parishads often require sufficient funds to perform their duties effectively. However, due to inadequate income, many essential public services remain unmet. Therefore, strengthening the financial capacity of Union Parishads is crucial.

Proper assessment and collection of holding taxes are critical and time-consuming tasks. Moreover, the management of collected funds, budget preparation, record-keeping, audits, and financial oversight are all part of effective financial management. Unfortunately, many Union Parishads struggle to perform these tasks properly due to various constraints.

To accelerate the activities of a strong local government and increase tax collection, it is necessary to appoint permanent tax collectors and strengthen the Union Parishad’s workforce. To encourage taxpayers, government services like bank loans, licenses, land buying and selling, etc., should require the submission of Union Parishad tax payment receipts.

To ensure the socio-economic development of the country, Union Parishads, as grassroots local government institutions, must be empowered financially. Effective and self-reliant local governance will expedite development. In this context, it is essential for the state to adopt a supportive rather than a controlling role.