The BBMP is all set to revise property tax in the city and impose four other taxes amidst fears that honest taxpayers will continue to bear the brunt of the hike, while the defaulters go scot-free. Civic activists, who are not against periodical revision of taxes, however, insist it must go hand in hand with better fiscal management.
If the BBMP has its way it will no longer be cash-strapped as it has been for long as the civic agency is leaving no stone unturned to make big bucks. Not too long ago it increased the trade licence fee and proposed to levy a vehicle cess. Now it is prepping up to revise residential property tax by 20 per cent and commercial property tax by 25 per cent, allowing it to straightaway collect Rs 800 crore more annually.
This apart, the BBMP is hoping to collect more taxes by reshuffling tax zones, which could come as a blow to property owners as it will result in a steep hike in the tax they will have to pay. For instance, areas in periphery zones which may have been poorly developed in 2007 and were part of ‘E’ or ‘F ‘ zone, could be added to ‘C’ or ‘D’ zone as they are now developed. The property tax will inevitably see a rise of 50 to 60 per cent in these areas due to the increase in guidance value.
While the BBMP is tapping all its resources to make more money, it may not be all smooth sailing for the agency as it is claimed it has no idea how many properties there are in its limits. Though several reports say 55 per cent of properties in the city are in the tax net, the agency collects taxes from less than 15 lakh properties, and is said to have no clue about the properties that are under construction, how many have khata and so on.
CC Code to identify properties
Inevitably, it has drawn flak for deciding to increase the property tax when it has still not brought all properties under the tax net and 45 per cent of property owners are not paying taxes even now. But in its defence, the BBMP says the hike is inevitable and it is coming up with a new plan to bring all properties under its tax net.
“The fault lies in the failure to increase the taxes periodically. To ensure 100 per cent tax collection, we are introducing a CC Code for every property in a layout and subsequently the ward. The CC Code is a simple ward mapping that will help us identify how many properties there are in each ward and how much revenue a zone is capable of earning. With this, all the properties will be brought under the tax net,” says Mr M.Shivaraju, chairman, Tax and Finance Committee, BBMP.
Not buying the BBMP’s arguments, however, many civic activists and groups like Citizen Action Forum are considering going to court to stall its move to hike the property tax.
Compulsory pet licence
Although it is compulsory for all pet owners in the city to have a licence under the KMC Act, it’s not taken seriously, according to mayor Manjunath Reddy. Now, the civic agency is preparing to crack the whip. Says the mayor, “We have received many complaints from people about their neighbours’ unruly dogs, who they fear could even attack them. So we are planning to make the pet licence compulsory for all dog owners. The idea is to make them more responsible and ensure there is no threat from their pets.”
Vehicle cess not scientific: Sridhar Pabbisetty, CEO, Namma Bengaluru Foundation
The BBMP’s proposal to increase property tax and impose a vehicle cess is neither scientific nor systematic. For a city to grow, taxes may have to be increased periodically. So we could accept the 100 per cent increase in trade licence. But what about the property tax hike? When the BBMP has failed to bring half the city under the tax net, how can it propose another increase? Those who are regularly paying taxes should not have to bear the brunt because some are not paying. Also, levying the vehicle cess is a bad idea. When vehicle owners are already paying road tax, why the additional burden of cess? A logical adjustment would be for the BBMP to impose a vehicle cess on new vehicles and collect a certain percentage from the transport department.
BBMP should disclose expenditure: Srikanth Viswanathan, Janaagraha
The BBMP has improved its financial management over the last six months and updated its website. But when finalising the budget, it should focus on three key criteria. First, it has to give primary importance to quantitative outcomes and targets. Which means the budget should not merely be a statement of receipts and payments. The BBMP should disclose what is being spent where.
For instance, if the agency says it spends Rs 3,000 crore on major roads, what would the common man understand? It should indicate locations or areas where it proposes to build or has already built roads.
Second, it must improve neighbourhood allocation. The corporators get around Rs 2 to 3 crore per ward, which is less than 20 per cent of the total budget. If more attention is given to allocation, it strengthens the budgetary process.
Lastly, the BBMP needs to have an objective criteria. What this means is when it says it will develop parks at a cost of Rs 100 crore, it should know how many parks are there in the city and what their condition is. It must be able to analyse which park needs how much funds. Community assets must be developed on objective criteria.
Q&A with G. Kumar Naik, BBMP Commissioner
Increase in property tax, trade licence fee, solid waste management cess, proposal for vehicle cess and revision of zones. Isn’t it too much of a burden for the common man?
A: It does sound like too many taxes, but when the citizens pay their tax, it will not be a huge burden. Overall, we are expecting an additional Rs 800 crore in revenue if the property tax is increased. This will be a major relief and lessen the burden on the agency.
When will the final notification on property tax be issued?
A: Well it’s tough to say exactly when as meetings are going on and we are still collecting suggestions and feedback from people. The new tax rates, however, will be introduced most likely from the beginning of April.
With so many additional sources of revenue, what will be the focus of the budget?
A: We have taken suggestions from various citizens groups and are also utilising survey reports submitted by some NGOs. There is a lot of information available. Since all the department heads are reviewing the works, it’s too early to say what will be the focus of the budget. But it will be a realistic budget.