Hike in property tax mooted by BBMP

Hike in property tax mooted by BBMP
Highlights

The Bruhat Bengaluru Mahanagara Palike BBMP has mooted a 25 hike in property tax in residential areas and 30 in commercial areas Under the pressure of undertaking new civic projects and have faced with few avenues to raise funds, that is being endorsed by the state government, the rates will be coming into effect from April 1 next year

BENGALURU: The Bruhat Bengaluru Mahanagara Palike (BBMP) has mooted a 25% hike in property tax in residential areas and 30% in commercial areas. Under the pressure of undertaking new civic projects and have faced with few avenues to raise funds, that is being endorsed by the state government, the rates will be coming into effect from April 1 next year.

Confirming the proposal, N Manjunatha Prasad, BBMP commissioner told a source that “Revision of property tax is being done as per the Karnataka Municipal Corporation Act which mandates revision once in three years. I have forwarded a note to the council in this regard.”

The BMC's proposal to hike the tax by a high margin can be justified if it can show that it renders top service for every rupee it is going to collect. But that is not the case. The citizens can point to a long list of grievances including poor roads to inefficient garbage disposal to show the Palike squanders taxpayers’ money.

Palike officials have described that the proposal as “much required” since the civic agency has been struggling to complete the ongoing projects or to undertake new ones due to unavailability of funds. Observers, however, say that such a hike is unlikely to go through in an election year.

“Subsequently, the proposal will be discussed in the BBMP council before being forwarded to the state government.” There are about 19 lakh properties in the city of which at least three lakh owners default on payment every year.

This year (2018-19), the Palike had only collected Rs 2,000 crore with a target of Rs 3,000 crore. The proposed hike will be witnessing the civic agency mop up an additional Rs 500 crore. The property taxes were last revised in 2016.

While the tax for residential properties have been increased by 20%, it was hiked by 25% for the commercial properties. The government had rattled due to the massive hikes because the BBMP did not revise the taxes in 2008-09 or 2013-14 as it was mandated by the Act for political considerations. “This is one of the reasons for B financial crisis,” a source said.

“It is unlikely the government will approve such a huge hike in the run-up to Lok Sabha elections. Either the quantum of hike will be scaled down or it will be delayed till the polls are over,” a corporator said.

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