Minister agrees to release 95 p.c. of Profession Tax collected in city

The government had agreed to release 95 per cent of the Profession Tax collected in the capital to the GHMC in the coming financial year of 2011-2012. Minister for Finance A. Ramnarayana Reddy made an assurance on the issue to Mayor B. Kartika Reddy and Deputy Mayor Jaffer Hussain when they called on him on Wednesday.

Currently, the government is releasing Rs. 50 crore each year and the amount is expected to swell up to Rs. 150 crore if the substantial portion of Profession Tax collected is released. In identical representation made to the Finance Minister and also Minister for Municipal Administration & Urban Development, Maheedhar Reddy, the Mayor and Deputy Mayor complained that GHMC was being deprived of its legitimate share in revenue transfers from the Government.

Apart from Profession Tax compensation, property tax on government buildings and Motor Vehicle Tax compensation too was sought.

They pointed out that the government had issued orders way back in 1997 to pay property tax on its buildings lumpsum rather than through individual departments. But, only an amount of Rs.20.13 crore was being released to GHMC where as the actual demand is Rs.183 crore.

Similarly, the government took over the collection of Motor Vehicles Tax from the local bodies while promising adequate compensation to the municipalities. Yet only Rs. 60 lakh per annum was being released to GHMC whereas a huge amount is being collected in the city by the Transport Department.

Ms. Reddy pointed out that the municipal corporation was maintaining nearly 7,000 km of roads under its jurisdiction and thus incurring a huge expenditure.

The government had also accepted the Second Finance Commission's recommendations to allocate 10 per cent of the MV Tax to the local body and hence, GHMC should be getting at least Rs. 50 crore a year is their reasoning.

  • Government releasing Rs. 50 cr. each year; amount expected to go up to Rs. 150 cr.
  • Property tax on government buildings, Motor Vehicle Tax compensation also sought