Proposal to reorganise tax zones with areas developing fast

Gear up to shell out more property tax as the cash-strapped Bruhat Bangalore Mahanagara Palike (BBMP) is moving to hike the rates.

The proposal is likely to be tabled before the BBMP council next Tuesday. The civic authority also proposes to reorganise the tax zones, besides taking measures to review the rates under the Unit Area Value system.

According to the Karnataka Municipal Corporations Act 1976, the tax rates may be revised by 15 to 30 per cent every three years, also known as block period. They were due for revision in April 2011, after Self Assessment Scheme was introduced in 2008-09. However, the BBMP council resolved to up the block period to five years and sent it for government approval though it has not heard from the latter yet.

CAG questions

Meanwhile, the Comptroller and Auditor General (CAG) raised objections to the failure to revise tax rates, and sought an explanation, prompting BBMP to reorganise the tax zones and increase the property tax rates.

K.A. Muneendra Kumar, chairperson of BBMP’s Standing Committee for Taxation and Finance, told The Hindu that the subject is being tabled before the council only “for discussion”. “More important than increasing tax rates is the reorganisation of tax zones. For instance, Mahadevapura comes under C tax zone.

Though commercial activities have increased, the tax rate is low. By reorganising the area under a higher tax zone, the BBMP will be able to get more tax from commercial establishments there.”

He insisted that tabling the subject did not mean that the tax would be increased. “The final decision will be taken by the BBMP council.”

‘No moral right’

Opposition Leader M.K. Gunashekar voiced his objection saying that the ruling Bharatiya Janata Party had failed to develop the city and thus had “no moral right” to even propose increasing the tax rates.

Other sources

“There are many revenue sources that can be strengthened; instead, the BJP is keen on burdening the middle class,” he said. “The BBMP can work on reducing the administrative expenses, increase non-tax revenue such as advertisement tax, collect betterment charges and implement Akrama Sakrama and Optic Fibre Cable (OFC) policy,” he added.

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