Articles by Shyam Nath

to Octroi Shyam Nath Tapas Kumar Sen One of the recent developments in the area of revenue of local governments is (hat octroi is on its way out. A vigorous drive is on to locate a new tax to compensate the urban local bodies for the loss of octroi revenue. Tax supplements 'to sales tax in the form of entry tax and surcharge/additional sales tax have been employed as a substitute measure to restore local fiscal balance in the absence of octroi The present study evaluates these tax supplements in terms of their impact on resource allocation, equity, and local fiscal autonomy. Surcharge/additional sales tax has been argued to be better than entry tax. However, these taxes being state levies are found to be contradictory to the objective of local fiscal autonomy.

This study of the residential property tax in Calcutta confirms that the tax is inequitous. Further, the conditions in the housing market are conducive to the shifting of the tax to the consumers of housing. Estimates of the elasticity of housing services with respect to income suggest that the residential property tax possesses built-in regressivity. The tax in Calcutta is much more regressive than what the income-rent relationship would suggest. It is only through fax rate changes and efficient administration that the regressivity can be reduced or progressivity introduced. For the tax to be fair and to be closely related to the services it supports, the assessment disparities should be minimised and tax rates should be so structured as to generate tax demands according to the ability to pay THE property tax on residential housing is one of the less popular of taxes and is widely regarded as being unfair. It is considered that this tax is-neither closely related to the ability to pay nor to the benefits received from the services it supports. It is further contended that the tax is degressive, i e, it casts a disproportionately high tax burden on low value properties and the low income owners or users of properties. These issues have attracted researchers in many of the advanced countries particularly the United States [Aaron, 1975; Black, 1977; Peterson 1972; Paglin and Fogarty, 1972; Advisory Commission, 1978; Dahlby, 1982; Ellis et al, 1983]. However, these aspects have not been adequately explored using Indian data. The present paper attempts an empirical investigation of some of the aspects of the equity of the property tax on residential housing. The analysis is based on a case study of Calcutta.