RAA:The Thimphu thromde suffered a revenue leakage of Nu 10 million (M) for not collecting land taxes and penalties from private landowners last year, 2014.
This, the audit report 2014, states is a violation of the provisions of Land Act 2007.
The audit report states that that the non-payment of land taxes and penalties ranges from one year to 15 years. The non-collections of the land taxes had occurred due to existence of poor land management system with the thromde.
“The Thimphu thromde did not assess the expected land tax revenue generations as per the existing asset register to facilitate comparison with the actual tax revenue collections for each year,” the report states. “Nor did it update the register in a timely manner against the tax payments to ascertain and prepare the outstanding list of defaulters of land tax, to follow-up and keep track of the defaulters.”
In the absence of such processes, it stated the Thimphu thromde had failed to collect land taxes and the 24 percent penalty on land owners. “One of the reasons for non-collection of taxes and penalties was that the provisions related to serving notice to the defaulted landowners and imposing penalties were not invoked,” the report stated.
The Thromde administration had cases of non-levy of fines and penalties amounting to Nu 287,000 from various defaulters.
The audit report says that a total of Nu 496,000 was collected from 852 registered building owners for the financial year 2012-13. However, on cross checking the list of building owners who had paid the urban house tax with the building information obtained from the geographic information system of the home ministry, urban house tax was not collected from 8,708 buildings.
While the Thimphu thromde had a dedicated land record and survey division, the responsibility on the maintenance of the Thromde property register for recording the land information is assigned to the revenue section.
The land tax, according to the report, was collected on the basis of land register maintained by the revenue section. It was noted that some of the plots though appearing in the local area plan, were not updated in the land register maintained by the revenue section.
“The land property register was not properly maintained as some pages were not only missing from the register but also found in distorted forms,” states the report.
The Thromde administration had not imposed 24 percent penalty of Nu 711,000 on account of non-deposit of revenue on time. “This was in violation to the provisions of the Revenue Accounting Manual 2004.” The case was forwarded to Anti-Corruption Commission (ACC).
The audit report also states that the revenue collections in cash amounting to Nu 5M were not deposited by the thromde administration on daily basis or on the next working day.
This, the audit report states, was in violation to the provisions of the Revenue Accounting Manual 2004.
The withholding of revenue collections, particularly in cash on a daily basis at the end of each month rendered a scope to misuse revenues through teeming and lading process where the subsequent collections were used for covering up the earlier collections.
By MB Subba