Chattogram port, city locked in standoff over Tk220cr holding tax hike

An appeal hearing was held at the City Corporation on 3 May, and the revised tax was formalised in the presence of the mayor. A payment notice was issued the following day.

The port – largest contributor of holding tax to the city – has confirmed receipt of the notice and said it is reviewing the matter in line with applicable rules and procedures.

The dispute has come into public focus after Mayor Shahadat Hossain said on several occasions that port vehicles weighing 40 to 50 tonnes are causing severe infrastructure damage.

However, he said the city is not seeking compensation for the damage but is only attempting to realise its “fair share” of holding tax. He also claimed that despite directives from the shipping ministry, the port has been creating complications over payment.

According to city records, the port’s holding tax was initially assessed at Tk160 crore during the last reassessment in FY17. Following objections from the port, the amount was later reduced to Tk45 crore during the tenure of former mayor Md Rezaul Karim Chowdhury.

After assuming office on 3 November last year, Mayor Shahadat initiated steps to restore collection at the earlier assessed level of Tk160 crore.

Joint survey, valuation disagreements

An eight-member joint committee was formed on 14 August last year to resolve the dispute.

Based on a joint survey of the port’s 1.73 crore square feet of structures, the city assessed the holding tax at Tk264.35 crore. The port agreed on the physical measurements, but disagreed with the assessed tax amount.

Meanwhile, the port wrote to the shipping ministry on 13 April seeking guidance on the tax.

In its response on 22 April, the ministry stated that under existing rules and laws, the authority to assess holding tax lies solely with the City Corporation. The letter said the shipping ministry holds no jurisdiction over the matter and directed the port to pay the tax.

Prior to this, the city issued the first notice for the payment of Tk264 crore in holding tax on 22 April. The port filed an appeal against this on 28 April, claiming that the tax had not been assessed correctly in accordance with the Municipal Corporation Rules.

According to the port’s own assessment based on the joint survey, their holding tax should be Tk14.87 crore, whereas they are currently paying more than three times that amount.

The port further pointed out that holding taxes are legally subject to reassessment every five years. Although Tk160.16 crore was demanded for FY21, both parties had agreed in a subsequent meeting to fix the annual holding tax at Tk45 crore starting from FY22.

Consequently, the port claims that any newly assessed holding tax should only take effect from FY27 fiscal year.

City Corporation Secretary Mohammad Ashraful Amin told TBS that the port’s annual holding tax of Tk264 crore was determined based on the joint survey. He added that there is no scope to pay less than that. He further said the port could appeal if they had objections.

Chief Revenue Officer SM Sarwar Kamal said that during the hearing, the port requested a reassessment of the tax, but there is no legal scope for that.

He said any objections regarding the finalised holding tax can be appealed to the Divisional Commissioner, but 75% of the assessed tax must be deposited beforehand.

Syed Refayet Hamim, secretary (additional charge) of the Chattogram Port Authority, said, “We have received the notice. Necessary steps are being taken as per the rules.”