Revenue slightly up despite decline in land transfer deals

Dhaka,  Monday,   2016-09-16
Published : 16 Sep 2016, 23:55:14

Revenue slightly up despite decline in land transfer deals

Rising sale of high-valued property does help
Jubair Hasan

The government's earnings on account of registration and other fees from the sale of land increased slightly in the financial year 2015-2016 despite a substantial decline in the number of land transfer deals.

Officials, however, attributed such an increase in the government's overall revenue from this key non-NBR sector to a considerable rise in transactions of high-valued property, coupled with higher registration fees.

According to the office of the Inspector General of Registration (IGR), the government earned Tk 109.26 billion from registration of over 3.4 million deeds in financial year (FY) 2015-2016.

Of the earnings, Tk 94.79 billion came in the form of registration fees and Tk 16.45 billion as local government tax.

The earnings were 1.6 per cent more than that of the overall revenue receipts (Tk 107.53 billion) in the previous FY when nearly 3.7 million deeds were registered.

The reverse scenario was also seen in the previous fiscals when the government received significant amounts of revenue from the property market despite lower sale of landed property.

In FY 14, the government received around Tk 87.94 billion revenue from over 3.80 million land sale deeds. The figures were Tk 87.94 billion and 4.43 million respectively in the previous FY.

Revenue earned from land registration occupies a substantial part of the government's annual non-NBR fiscal target for any year.

The revenue-generating sources from property sector are registration of transfer deeds including fees, certified copies of documents, stamp fees, tax at source, renewal fees, land handover fees and some other fees.

When contacted, IGR Khan Md. Abdul Mannan admitted the fall in sales of land, saying that revenue earnings from the sales have increased slightly in the FY'16.

"Growing transactions of high-valued lands across the country is the reason behind it," he said.

He said land prices have gone down by nearly 20 per cent in many areas across the country, prompting the potential sellers to suspend or halt their decisions on sales.

The IGR said expatriate Bangladeshis on an average account for nearly 25 per cent share of annual land transfer. But they are now facing many difficulties, especially in Malaysia and the Middle Eastern countries, casting a negative impact on this sector.

"It is being reflected in the sales data. But we're hopeful of crossing the target of revenue that we collected in FY 16," he said.

Seeking anonymity, a senior official at the IGR Office said they are updating minimum value of lands in each area after two years.

He said many buyers do not show the actual prices of land beyond the minimum land value during registration to avert additional cost. "That's why we need to revise it on a regular basis."

Talking to the FE, President of Bangladesh Registration Service Association (BRSA) Dipak Kumar Sarker said land prices have gone up by 20-30 per cent in accordance with the latest revised minimum value of land, which came into effect from January 2015.

"We do make the calculation taking into account average price of the deeds of sales in a particular mouza (area). We'll revise it again in November 2016 before it is applied from 2017," he added.

Meanwhile, other sources noted that many potential buyers of lands and apartments are not in a position to show their funds matching the deed value, as a large amount of money still remains undisclosed in the country for a variety of factors.

Such buyers fear getting into tax-related troubles if their wealth statements, submitted along with annual tax returns, do not provide reasonable grounds for explaining properly the sources of fund for purchase of lands or apartments, the sources added.
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