Urban News

  • Increase font size
  • Default font size
  • Decrease font size
Taxation

BMC yet to find way to tax slums

Friday, 16 August 2013 09:39 administrator
Print PDF

Hindustan Times             16.08.2013

BMC yet to find way to tax slums

Even as many residents have complained of having to pay an increased property tax under the new system, a large section of the citizenry – Mumbai’s slum dwellers – will be exempt from the tax for at least another year.

The civic body has no format for taxing citizens living in slums at present, and the one it finalises on will take at least a year to implement.

The Brihanmumbai Municipal Corporation (BMC) has asked the Mumbai University to study different tax modules that can be used to levy property tax in slums. The university is expected to submit a report within 15 days.

“There is a long procedure to put the system into effect. After the university submits a report, we will consider the methodology to be used,” said Rajiv Jalota, additional municipal commissioner, BMC.

More than 60 lakh city residents live in slums, and residents are not happy they have been left out of the tax calculation.

This year, the civic body implemented the capital value-based property tax system, which met with great opposition from residents and some activists.

The new system takes into account several factors, such as the age of the property, the ready reckoner rate, built-up area etc while calculating tax, and replaces the rateable tax system, which only took into account the rent a property fetches.

Many citizens were unhappy at the prospect of having to pay an increased tax amount.

“The tax calculation itself is unfair, what’s worse is that a huge number of residents have been left out of the system. When an RTI application was filed questioning why the BMC is not considering slum residents, I received seven to eight replies, in which each department kept passing the buck,” said Godfrey Pimenta, RTI activist who alleged vote bank politics as the main reason for exemption.

Residents now plan to start an online petition demanding slum residents be taxed at the same rate as other citizens, but civic officials said they are yet to take a call on this too.

“The rate of tax for slum dwellers will be decided in the coming months, and will be based on the facilities they get and the amount we spend on them.”

“All slum residents are ready to pay property tax provided they are given the rights to their property,” said Jameel Shaikh, an activist working for slum residents.

 

2% extra monthly interest for property tax evaders

Friday, 16 August 2013 09:37 administrator
Print PDF

Deccan Chronicle              16.08.2013

2% extra monthly interest for property tax evaders

Hyderabad: Tax evaders beware. The Greater Hyderabad Municipal Corporation will charge two-and-a-half years’ property tax with retrospective effect along with 2 per cent extra monthly interest from those who have not paid their taxes.

If a building is found un-assessed, that is tax is not being paid on it, then the GHMC’s tax officials will charge extra property tax. For example, if the tax assessment for a year comes to Rs 1 lakh, the citizens will have to pay an additional property tax of Rs 2.50 lakh for two-and-a-half-years with retrospective effect.

Besides, 2 per cent monthly interest will also be charged on the Rs 3.50 lakh. A similar punishment would be imposed on those who are found guilty of paying less property tax.  There are thousands of buildings in the city, which are under-assessed.  Similarly, there are hundreds of buildings whose owners haven’t paid property taxes, as per a rough assessment.

A large number of additional floors, flats and portions of buildings that were regularised under the building penalisation scheme are yet to be brought under the tax net. There are also a large number of buildings to which two or three extra floors were added without paying enhanced taxes. Besides, there are residential buildings that are being used for commercial purposes but their owners continue to pay residential property tax.

However, the GHMC would reward citizens with a five per cent rebate if they pay their property tax each year before the due date of April 30.

The government has also permitted the owners of buildings that have been levied extra taxes with retrospective effect to present their case against such assessment.

GHMC additional commissioner (Finance) Ashok Reddy said that as per the amended GHMC Act it hadn’t been made mandatory for the municipal body to serve tax bill to citizens. Building owners have to pay property taxes annually on their own whether bills are served on them or not.

Deputy municipal commissioner M.S.S. Soma Raju said the government had also imposed a restriction on leasing out of municipal owned properties. Earlier, GHMC didn’t have powers to lease out properties for 99 years or for even 33 years. The occupants of municipal markets and other municipal owned properties have to vacate their premises before fresh lease agreements can be made.

 

BMC engages MU to conduct study on taxation in slums

Wednesday, 14 August 2013 10:55 administrator
Print PDF

The Indian Express             14.08.2013

BMC engages MU to conduct study on taxation in slums

The Brihanmumbai Municipal Corporation (BMC) has invited the economics department of Mumbai University (MU) to conduct a study on taxation in slum areas after rolling out the new property tax regime based on capital value in Mumbai this year.

In addition to a thorough research of the slum areas and the probable methods of taxation, MU is expected to study the tax models for slums in other parts of the world and suggest a new system that can be incorporated in Mumbai. Revenue collection from slum areas, which constitutes over 60 per cent of Mumbai's total population, is estimated to bring in roughly Rs 1,000 crores for the BMC.

"According to the law, the municipal body must collect tax from all structures in the city - be it legal or unauthorised. We have now asked the economics department of Mumbai University to conduct a study for us on how we can implement the new tax. They will respond to our invitation in the next 15 days. We need to know if they can do manage the full scope of work. For unauthorised constructions on originally authorised buildings, we have asked former BMC official S Agarkar from the assessment and collection department, to form a taxation plan," said additional municipal commissioner Rajeev Jalota.

While developing the taxation model, MU will not only have to see how taxes can be implemented based on regular factors such as the ready reckoner rate and plot size but will also have to consider other aspects such as the quality of civic amenities available for residents of slum areas. "This includes evaluating the drainage system available, the road condition, and the water connections that every household has access to. Based on these facilities MU will suggest a tax policy which will be further discussed and finalised following due process in the BMC," Jalota said.

It will be researched how the collection will be carried out. "Manual collection would need more than 1,000 persons and the BMC cannot spare such manpower. We will either have to appoint a collection agency or look for other means of collection such as through phone bills," a senior official in the assessment and collection department said. He added that the corporation is also looking at possibilities of linking the tax model to the Aadhar Card system and individual bank accounts.

The study, and later implementation of the finalised tax policy for unauthorised structures will take another year. "Six months to carry out the study and another six months to form the policy for implementation based on the findings. Despite the debates that are bound to crop up, slum people may welcome this move as it brings legitimacy to their residence. Unlike water tax which is billed to a group, property tax is for every household," said Jalota. The arrears on property tax for slum properties is likely to be waived off, he added.

"It may be too much of a burden for the poor. We are considering collecting the tax monthly to ease the pressure of the annual amount- it will be a considerably lesser to handle every month," Jalota said.

 
More Articles...


Page 43 of 265