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24 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES
Municipalities are allowed to levy a tax upon property. Sir, this competition by Government into a field of taxation which is reserved for municipal bodies, I am sure, will prove greatly detrimental to the growth of local selfgovernment. I will not say anything more on that point. But I will refer to certain other aspects of the proposal and the first aspect is this. The tenants of the Bombay City have been carrying on an agitation that the rents in the City of Bombay are abnormal and that they should be reduced. Now, Sir, if the Government as it is going to do by this measure of taxation, is going to take away 10 per cent. of the value of the property, it should not in the same breath say to the landlord that he shall also reduce the rent of the tenants who have been agitating against the present high pitch of rent. Therefore, what the Government is doing is really nothing more than defrauding the tenants of the Bombay City and similarly of Ahmedabad and Poona by taking away from them what was legitimately their due ; and I think that is certainly one of the most serious objections that can be urged to this measure.
Secondly, this property which is to be the subject-matter of taxation under the Government proposal cannot be said to be property which is not subject to taxation now nor can it be said that this is a property which has been lightly taxed and, therefore, can still bear a higher taxation. Let me take the case of Bombay City itself.
The Honourable the Speaker: I am afraid there is a misunderstanding ; Poona is not included in this taxation proposal.
Dr. B. R. Ambedkar: I am sorry—only Bombay and Ahmedabad. Now, with regard to the position in Bombay, what one finds is this. The Bombay Municipality levies on the whole 18½ per cent. on the rateable value of the property for its own use. In addition to that, the owner of the House has to pay, what is called, ground rent if the property is a leasehold property. In addition to that, he has to pay income tax to the Government of India on the income which he derives from the total rental of his property. Taken all together. I think all this burden would certainly come to about 22 to 23 per cent. (An Honourable Member : 50 per cent.). Well my honourable friend says it would come to 50 per cent.; he will probably explain it later on. What I point out is this that it cannot be said that this property is a lightly taxed property ; it is a property which is already heavily taxed and, therefore, it will be very unjust to impose upon it a further burden of 10 per cent.
The next thing that I should like to point out to the Honourable the Finance Minister is this. He seems to treat this tax as though it was just a rate and not a tax. Well, I have a quarrel with him on that point What he is levying is not a rate but it is a tax. The difference between a rate and a tax is this. A rate is something for which you get specific service. We pay rates to the municipality because in return for what we pay to the municipality we get direct service—we get water, we get conservancy, we get lighting, we get various other services. It is really a charge for the