Even though holding tax is the second highest revenue generator for
the Bhubaneswar Municipal Corporation (BMC), the corporation is helpless
when it comes to bringing tax defaulters to task in the absence of a
strong legislation.

During its inception, BMC followed the Orissa
Municipal Act, 1950 and then the Orissa Municipal Corporation Act, 2003
was implemented. The holding tax, a part of the Orissa Municipal Act,
1950, is toothless as it does not give the corporation the actual power
to deal with the defaulters who have not paid the holding tax yet or are
repeated defaulters.

“In the Act introduced in 2003, the holding
tax was upgraded to be known as property tax. But the Corporation Act
was not implemented in its complete form in 2003. A few Acts under it
are still awaiting State Government’s approval,” said BMC Deputy
Commissioner KP Pati. The property tax and the rules under it are also
yet to get the Government’s approval.

BMC’s highest revenue of Rs
50 crore is generated through entry tax that the government pays
annually. The second highest revenue of about Rs 20 crore is collected
through holding tax. Like last year, this year also BMC managed to
collect Rs 20 crore. “If the property tax is brought under the
Corporation Act introduced in 2003, it will give the corporation
additional power. Under the Act, even the owners of vacant land have to
pay holding tax,” said tax inspector Nagen Pujapanda.

Another
problem that BMC faces is that the Government is one of its highest
defaulters along with a few other private parties. For the last few
years, BMC had been putting up hoarding displaying the names and details
of the highest defaulters but to no effect. This year, BMC stopped the
practise as the defaulters did not pay any heed to it. “We will have to
devise other ways of collecting the pending holding tax from them,” said
Pati. He added that since there was no strong legislation to back the
corporation, all they can do is send the defaulters a distress warrant.

BMC
resumed the assessment of the tax units in the city in the last fiscal
year. They had stopped it for the past few years due to a stay order by
the High Court in 2010. They have added 7000 tax units this year in
addition to 81,000 holdings that they had assessed before 2010. BMC is
targeting to collect Rs 30 crore in next fiscal by increasing the number
of holdings through assessment.