Bangalore: BBMP’s tax rates have remained constant since 2008, while inflation has soared, resulting in a massive debt with nowhere to hide.
The only way out is…. Raise taxes. The Bruhat Bangalore Mahanagara Palike (BBMP) is set to raise property taxes by 20 per cent for residential buildings and 25 per cent for commercial buildings. The hike will come into effect from April 2015.
This decision follows a directive from the government to the civic agency. But that’s not all. They have also ordered the civic authority to raise taxes every three years. The BBMP proposal was, every five years!
M Lakshminarayana, the BBMP commissioner, has already conveyed the government directive to the civic agency’s standing committee on taxation and finance.
What this hike will bring to the kitty is additional revenue of Rs 850 crore to Rs 1,000 crore, but as usual and sadly, it is unlikely to result in better facilities for residents. Officials say additional revenue collected through the increased tax rates will go to servicing loans and paying off pending contractors’ bills – a never ending story.
Rules mandate that the BBMP raise taxes by at least 15 per cent every three years; if it had followed norms, tax rates would have gone up by 32.25 per cent from the 2008 level for residential buildings. The government, though, has kept it down at 20 per cent.
But, what’s the use of raising taxes if there is no collection – Like our laws – there are plenty of them but no enforcement. The BBMP has consistently failed to meet targets over the last five years. The target for 2014-15, is Rs 2,500 crore, but the civic agency has managed to collect only Rs 1,120 crore as on July 31 this year. At most, officials, say another Rs 500 crore will trickle in by the end of the financial year.
Imagine! Three lakh property owners have not paid taxes in the last five years. They owe the agency an estimated Rs 588 crore. BBMP Commissioner, Lakshminarayana admitted it was a serious issue, but due process — issuing notice, etc. and officials apathy has left the loose ends… loose and the BBMP the loser.
There are also implications for the elections. Sitting Corporators will have to face the ire of the public just when the polls are due. But the council itself is to blame for the mess. They were due to be hiked n 2011 but the council led by the ex mayor blocked the proposal by extending the block period to 5 years which ended in March 2013, but with assembly elections around the corner, the state govt. remained silent. Now the chickens have come home to roost.
