: The Local Self-Government Institutions have urged the Fifth State Finance Commission to permit them to increase the tax and non-tax revenue under their jurisdiction every five years.
The local bodies, during their one-month-long sitting with the finance commission that ended on Saturday, have also demanded more field staff to collect the mounting tax arrears and to abolish the existing bye-law system for fixing the tax and non-tax.
The local bodies also claimed that it was their right to collect tax from new institutions being set up under the changing economic situation. This included tourist resorts, quarries, mobile tower and houseboats. Another demand put forward was the revamp of norms and procedures in project formulation and implementation.
The local bodies informed the commission, which has been tasked to look into the fiscal position, that property tax had not been revised for 25 years. There was no uniformity in tax collection. Of the 978 grama panchayats, service tax was being collected only in 150.
Professional tax
Professional tax was not being paid by those in the unorganised sector such as business, transport and services. In the case of lawyers, none was paying professional tax in Thiruvananthapuram. Only a few lawyers in Ernakulam paid tax, they said.
The commission was told that the tax arrears to be recovered by Thiruvaanthapuram Corporation was Rs. 59.48 crore, Rs. 21.88 crore by Thrissur, Rs. 5.55 crore by Kozhikode, Rs.13.06 crore by Kochi and Rs. 3.73 crore by Kollam Corporation. The same was the case with the municipalities. Lack of staff to collect tax was the main reason cited by the local bodies.
Project implementation was also in bad shape, the commission was told. Only 43 per cent of the Annual Plan outlay was utilised by Thiruvananthapuram Corporation, 56 per cent by Kollam, 71 per cent by Kochi and 49 per cent by Kozhikode Corporation in 2014-15.
In the case of municipalities, only 7 of the 10 had utilised 48 to 71 per cent of the outlay. The Pathanamthitta district panchayat had utilised only 67 per cent, Alappuzha 60 per cent, Idukki 53 per cent, Thrissur 58 per cent, Kozhikode 57 per cent and Kasaragod 66 per cent. Lack of engineering staff had been highlighted as the reason for poor implementation.
Finance Commission chairman B.A. Prakash told a press conference that the assessment from 104 local bodies would be taken into account while drafting the final report to be submitted by December.
Opinion of parties
The opinion of political parties, Planning Board and public would also be sought by the commission.
Mr. Prakash said local bodies in the State would face a financial crisis if steps were not taken to increase the tax and non-tax. The commission had collected data of all local body institutions and had assessed the civic functioning.
They also seek more field staff to collect tax arrears
