Property tax constitutes one of the biggest source of revenue for civic bodies. The BBMP collected nearly Rs. 1,900 crore this year. The Economic Survey 2017 presented by Finance Minister Arun Jaitley prior to the Union Budget hinted that the BBMP could do better and the total revenue could be enhanced to Rs. 4,000- 8,600 crore. The question that should be asked: Can BBBMP improve its performance on property tax?
Bengaluru has 709 sq. km. area under the civic limits administered by the BBMP. The survey stated that 80% of the tax potential remains untapped in Bengaluru and Jaipur, the two cities chosen for density of the built-up area and assessment of the property. The survey estimates that the BBMP area has around 25 lakh properties while it has identified only 19.5 lakh properties.
The estimate was arrived at on the basis of satellite images gathered from LANDSAT on the basis of building agglomeration. It also stated that the city ranked 11th in terms of availability of services among Urban Local Bodies (ULBs) whereas in terms of transparency, accountability and participation, it stood at the 8th place (below Bhopal, Ludhiana, Lucknow and Kanpur). As for per capita capital expenditure, the city ranked 15th. The survey stated that better services and their delivery depended upon better mobilisation of resources, proper assessment and plugging the loopholes.
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Flawed
But officials term the survey flawed and say any survey from space cannot gather a realistic data about the properties and built-up area in a city. M.K. Gunashekar, Chairman of the BBMP’s Taxation and Finance Committee, rejects the estimates as totally unreliable.
He says nearly 15% of the BBMP area is under Defence and Air Force Station which does not pay any taxes. Similarly, other Central and State government establishments and public sector industries do not pay any taxes. BWSSB infrastructure (underground reservoirs, overhead tanks, STPs) need not pay any taxes.
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Service providing institutions such as railway stations and bus-stands are also exempted from property tax. But space images mention them under the built-up areas.
He says there is no omnibus tax rates even for private properties. The tax categories for different zones (if M.G. Road is under ‘A’ zone, Shivajinagar is in ‘D’ Zone) have variable rates. Homes for bona fide residential purpose and those for rental purpose come under different slabs. Homes with marble, granites or red oxide flooring pay taxes at widely differing rates.
“How could one assess such ground realities from space images?” he questions.
Depreciation rates
He mentions that properties come under different depreciation rates for old and new structures.
Against owner-occupied homes, rented homes, commercially let out spaces and industrial area attract higher rates. Tax come under multifarious slabs. Self-occupied owners have 50 per cent rebate on property tax while a rented one attracts full tax. Satellite mapping does not mirror this vital difference but only shows the number of properties on the radar.
Total Station Survey
Mr. Gunashekar says the Committee has taken a decision last month to go for Total Station Survey of varied nature of properties. According to him the city’s character had changed over the years and it currently has around 70 technology parks, 40 shopping malls and hundreds of major industries which have turned out to be defaulters of property tax.
He said he has requested the Mayor to call a special meeting of the BBMP Council to conduct a debate on property tax structure and manner of collection.
He, however, concedes marginal deficiency in matters of exact calculation of built-up space in the city as majority of residents opt for Self-Assessment Scheme (SAS) and do not reveal the exact nature and quality of structures.
The author can be reached at maqsiraj@gmail.com