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article imageLevy additional taxes on foreign nationals owning houses in Goa Special

By Armstrong Vaz     Sep 27, 2009 in Business
Goa: Ambelim a fishing village on the banks of River Sal in Salcete taluka has sought to impose migrant tax on all migrants staying in the village.
How far the panchayat move has served to be practical remains to be seen, in a village where hordes and hordes of migrant workers descend during the fishing season.
Migrants’ issues have blown hot and cold over the years in Goa, but, the sea side tourist paradise state has yet another seasonal issue of foreign migrants who are long-time residents of the state to deal with, how about, taxing the foreign residents who reside in the state.
Yes, foreign nationals who reside for most of the part of the year in Goa (except for the rainy season when they dash off to their native countries) should be brought under the taxman ambit.
Why tax the foreign nationals.
A foreign national who owns a house in Goa legally or illegally (that is subject of a hot debate in cyber space and in the newspapers published in England) is duty bound to pay only taxes to the local council (panchayat or the municipality), he is not covered under any taxman’s scheme. So far so good for him.
The facilities and services he avails off in the state come to him at a subsidized rates, he or she uses the petroleum products, water and electricity for nine months of the year, all which is provided to Indian citizens at a cheaper subsidized rate by the government.
Indians are taxed at multiple levels and the taxes provide funds for the roads, water, electricity, petroleum products and other services and also serve as a pie for the development of the country.
While the average Indian is burdened by the bogey of different taxes why the foreign nationals who spend most of the time in India should be left scot free from the taxman’s loop, is a question which has been troubling me for a long time.
Another grey area on taxation front is the issue of foreigners lending houses for hire. As it amounts to a commercial activity, the Taxman noose should tighten on such foreigners in the state. Mind you, it a big industry which operates on the net, and is mostly dominated by foreign nationals based outside India.
Sadly, there are not much Goans who have applied their minds in renovating old houses in Goa, and giving them on hire. It is a business opportunity which is knocking on our doors. A void which has been filled in by the foreign nationals who have a spend a fortune in Indian terms but peanuts in terms of Pound and Dollar value to buy and then renovate old Goan houses and give them on hire.
Here is a sample of an advertisement which I found on the Internet about a house in my village Cuncolim.
“The house is a large old Portuguese style house called XANTI [which means PEACE in Portuguese]. It sits on approximately 1 acre of land surrounded with coconut, mangoes, cashews, bananas, pineapples and all varieties of fruit trees. We also have our own vegetable patch. It is fully furnished with 3 AC bedrooms. One large master bedroom with TV. with ensuite bathroom that can accommodate 3 people, and the other two bedrooms can accommodate 2 persons each .. with common bathroom. There is an additional detached cottage, with 2 very large AC bedrooms with attached bathrooms. The cottage has its own kitchen..With gas ..stove.. micro oven fridge electric kettle toaster. The cottage has its own entrance. There is ample parking space on the premises. The cottage is surrounded by a very large garden. The house is located approximately 45 minutes south of Dabolim airport, and 20 minutes south of Margao railway station. A taxi or auto rickshaw can be arranged to pick you up at either terminal. The house is an ideal place for those looking for a quite, peaceful getaway, tried of travelling..and need a beautiful clean serene place to just unwind..in the hammock under the trees..or in our beautiful verandahs.”
All the bookings and payments are online. In some cases it is mutual trust which works for the parties lending and hiring the house. So that makes the Taxman’s job difficult. But, the taxation department needs to do their home work and for that they will need constant inputs from the Police department.
The police department is privy to information regarding foreigners staying in the state.
The Taxation department, if they are serious in bringing the house lending business of foreigners under the taxman’s preview needs to work out a mechanism. A system, which should not be one which is exploited by the officials and the foreigners are harassed. Care should be taken on that count. And in a situation where doubts about the intentions of Goa government ordinance directing Registrars not to register sale deeds of foreigners , creating lot of hatred towards the state government, the administration should be threading on a safe course.
It’s time to stop the leakage of revenue in the house lending activities of the foreigners in the state. Sooner the better with the new tourism season set to usher in with the arrival of the first charter flight at Dabolim airport.
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