Government also decides to freeze the collection of Agricultural Income Tax (AIT) from the plantation sector.

Kerala has decided to scrap the plantation tax in view of the crisis in the sector.

Chief Minister Pinarayi Vijayan said in a statement in the Assembly on Thursday that the government has decided to do away with Plantation Tax. A commission headed by Justice (retired) Krishnan Nair that was appointed in November 2015 to study the problems faced by the plantation sector had said that plantation tax is one of the oldest taxes and it was levied only in Kerala. Hence, the government decided to do away with the tax, he said.

Kerala is the only State in the country which levies the tax.



The government had also decided to freeze the collection of Agricultural Income Tax (AIT) from the plantation sector. On felling and selling a rubber tree, a rubber grower would get only Rs.5,000. A sum of Rs.2,500 is levied as seigniorage charges on felling a rubber tree. Since the price of rubber has slumped this rate was felt to be too high. Hence, a decision has been made to completely waive seigniorage charges, Mr. Vijayan said.

The tenements of workers in plantations are too old and not habitable. The tenements cannot be made habitable through maintenance. Hence, the government has directed local self-government institutions to exempt them from building tax, the CM said.

A decision has also been made to include the tenements in the Life Mission total housing scheme envisaged to provide houses for the homeless. Houses would be constructed as per the guidelines laid for the mission.

The government would bear 50% of the construction cost and the remaining 50% would be borne by the plantation owners. The contribution of plantation owners would be collected in seven annual instalments without interest and they would also enter into a pact with the government to provide land free of cost to construct the houses for workers.

The Labour Department would consider a proposal to bring plantation workers within the ambit of ESI scheme. Lease of plantations would be renewed without any delay once the lease pacts expire. The Law Secretary would examine and submit proposals to clear the impediments, if any, in renewing the lease agreements.

The government is also planning to frame a legislation for taking over and run plantations that have been relinquished or closed down or form cooperative societies of workers and provide financial assistance to them to run such plantations. It is also considering the option of handing them over to private companies on condition that no change would be made in the nature of the plantations given to them, Mr. Vijayan said.

Labour Department would take steps to revise the wages of workers and also prepare a plantation policy to address the problems being faced by the sector, he said.

The lines (row homes) in which plantation workers are housed would be exempted from building tax. Instructions have been issued to the local government institutions concerned on this.

The seigniorage (fees) being levied on felled rubber trees would also go. A felled rubber tree would fetch Rs. 5,000. Of this, Rs. 2,500 need to be paid as seigniorage. This has been found to be too high, the Chief Minister explained.