The Hindu 23.02.2012
IT firms may pay more property tax
The Chennai Corporation has set the ball rolling towards
an increase in property tax rate and company tax for IT buildings in
the city.
Speaking at a council meeting on Wednesday,
Mayor Saidai S. Duraisamy said the property tax rate for IT parks was
on a par with that of small retail shops in the city. “The rental value
of such buildings is high and the companies are able to pay hefty amount
as salary to their employees. But, the tax rate for such companies was
not changed by the previous corporation council,” said Mr. Duraisamy.
“We have taken measures to review it.” According to Revenue Department
officials, the 175 sq km area of Chennai Corporation’s earlier
jurisdiction has 12,417 limited and private limited companies. The
Revenue Department has now been asked to create a comprehensive database
of companies located in the 426 sq km area of the current jurisdiction
of the Corporation and identify the exact number of IT companies located
in it. The Revenue Department the Chennai Corporation would then create
a separate category of property tax assessment for IT companies with a
higher tax rate.
At present, for companies with
investment of more than Rs.1 lakh, the company tax has been fixed at
Rs.100. Any company with an investment of more than Rs.10 lakh pays
Rs.1,000, which is the maximum company tax collected by the Chennai
Corporation. As part of the measures taken to augment revenue, the civic
body is now planning to increase company tax for IT parks, officials
said. On the other hand, the property tax ranges from Rs. 3-9 per sq ft.
Former
Chief Urban Planner of CMDA S. Santhanam said the rentals of such
buildings would increase because of the proposal and would affect
smaller players. “Larger players may not be affected. Small companies
may find it difficult to run business because of the increase in tax,”
he added.
National Association of Software and
Services Companies (NASSCOM) Regional Director A. Purushothaman said:
“So many IT buildings are vacant. The government should ensure that they
support the business rather than taxing them. This will go against
promoting Chennai as an IT destination.”