New Delhi: The second Aministrative Reforms Commission today advocated simplified property tax and abolition of octroi.

In its report on local governance, the Commission also suggested increase in fines for civic offences and amendments to existing laws to arm municipal authorities with powers to impose fines for such violations.

Suggesting scrapping of octroi, the Commission said states should evolve mechanisms to compensate the local governments for the loss of revenue. It asked the state governments to ensure that all local bodies switch over to the unit area method or capital value method for assessment of property tax.

Under the Unit Area Method, the parameters for assessment of tax can be changed periodically so as to reflect the market values. Property tax based on capital value overcomes drawbacks based on annual rental value as taxes are self-assessed by the property owner every year and while doing so, the market value prescribed for that year is taken into account.

This ensures that the property tax reflects the current market value and hence is buoyant, the Commission noted in its 422-page report.

Source : PTI