Thiruvananthapuram: The Kerala Government is planning to implement the State Finance Commission's recommendation that the property tax charged by local bodies be hiked on a yearly basis if the inflation stands above five percent.

As per the existing provisions in the Panchayatiraj and Municipalities Act, a five per cent hike in property tax can be implemented only once in five years. But there are serious lapses in issuing notification in this regard and collecting dues.

Hence, the State Finance Commission has come up with the idea of a yearly hike. It also suggested amendments in the existing law to implement it.

Though the government's plan was to collect Rs 2099.49 crore as property tax during the last financial year, it could collect only Rs 959.23 crore (47.72%).

It was also recommended by the Commission that instead of the present practice of collecting tax on a half yearly basis, it should be charged on a yearly basis.

Other proposals under consideration

The Commission also wants new provision to be incorporated in the existing law so as to grant works such as painting and cleaning in the local bodies without tender to the specialised groups of the Kudumbashree.

Another suggestion is to constitute a Board of Fiscal Research under the stewardship of the State Chief Secretary to finalise the project cost of local bodies and make up-to-date the details of the financial situation of the local bodies.

LSGD not to collect luxury tax on houses

Local Self Government Department (LSGD) Minister MV Govindan has made it clear that his department has no plans to take over the job of collecting luxury tax.

Such a clarification was given by the minister after the State Finance Commission recommended higher property tax for houses having more than 3,000 square feet.

At present, the Revenue Department is collecting luxury tax for houses having more than 3,000 square ft. This practice will continue.

Govindan has already informed this to Revenue Minister K Rajan.