PANAJI
Goa’s local self-governing bodies – panchayats in the villages and municipalities in its cities including the Corporation of the City of Panaji (CCP) – are perennially short of resources.
This resource crunch may soon be alleviated, thanks to the move of the State government to accept the recommendation of the State Finance Commission to introduce a ‘professional tax’ on all ‘professionals’ operating in the jurisdictions of these local bodies.
Chief Minister Pramod Sawant-led cabinet had on Monday accepted the Commission’s report during the cabinet meeting held on the sidelines of the ongoing budget session of the Goa legislative assembly.
The State government will have to bring in a legislation to impose this professional tax by invoking Article 276 of the Constitution, which it will likely do in the monsoon session, an official of the Finance Department said.
Once implemented, professionals including chartered accountants, lawyers, doctors, dentists, architects and engineers among others, who operate out of offices will come under its ambit.
“These professionals will have to pay this additional ‘professional tax’. The demand will be raised by the respective local body alongwith the ‘House Tax’ demand,” the official said.
However, the ‘professional tax’ so imposed has to be capped to a maximum of Rs 2,500 annually.
According to the official, professionals like insurance agents, Limited Liability Partnership (LLP) surveyors, contractors, companies and business firms’ tax consultants will also come under the ambit of this proposed ‘professional tax’.
Indications that a ‘professional tax’ will be levied in Goa were first revealed when the Commission’s chairman Daulat Hawaldar held discussions with a team of the Goa Chamber of Commerce and Industry (GCCI).
The latter were not enthusiastic of the Commission’s move and had sought to impress that the thrust should be on widening the tax base instead of imposing a new tax.
Goa is among 15 States in the country that do not levy a ‘professional tax’ while 21 other States and Union Territories, including its two neighbours – Karnataka and Maharashtra – do.
The solace for professionals who will cough up the tax once it is implemented is section 16 (iii) of the Income Tax Act, which permits deduction of the entire amount paid as professional tax from the gross taxable annual income.
Meanwhile, while the move of the Finance Commission to recommend levy of professional tax to raise revenues may come as a boon, its recommendation for introducing customised accounting softwares across all these local bodies is expected to leave the accounts cells of Goa’s municipalities and panchayats huffing and puffing to keep books up to date. For, the Commission has also recommended mechanisms for real time monitoring of their spending and accounts.
