Proposal to be tabled in meeting tomorrow

Bruhat Bangalore Mahanagara Palike (BBMP) has proposed to increase the property tax rate for the financial year 2014-15. While property tax for residential buildings has been proposed to be increased by 15 per cent, for commercial buildings it is likely to be hiked by 25 per cent.

Though the tax hike proposal is expected to be tabled in the BBMP Council meeting on Tuesday, highly placed sources in the BBMP said that the proposal may not be accepted as Lok Sabha elections are round the corner. Even if the BBMP Council gives its nod for the proposal, approval will have to sought from the government before the tax hike is effected. “It is nearly seven years since the tax rates were revised. Property tax is the main source of revenue for the BBMP. If the rates are not hiked, the civic body has no chance of overcoming its financial crisis,” a source said.

As per Section 108-A (16) of the Karnataka Municipal Corporations Act, 1976, the BBMP has to revise the property tax rate by a minimum of 15 per cent and a maximum of 30 per cent once in three years.

Three years ago there was a proposal to hike property tax, but the council had rejected it. The Ruling Party councillors had said they would urge the government to change the block period from three years to five years.

According to sources, BBMP collected property tax totalling Rs. 1,176 till January 25. And, if the tax rate is hiked further, BBMP may get an additional revenue of Rs. 200 crore.

BBMP Commissioner M. Lakshminarayan told The Hindu that the proposal to hike property tax rate is not likely to be approved.

“Even before such issues are tabled in the Council, we need to discuss it in detail, ascertain the implications and compare the tax rates with those prevailing in cities in neighbouring States,” he said, adding that the proposal had not been vetted by his office.

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