After advertising ban, BBMP hikes taxes for revenue

After advertising ban, BBMP hikes taxes for revenue

The Palike is resorting to alternative measures to make up for the revenue loss. DH Photo

Facing an acute fund crunch in the light of the recent blanket ban on public advertising, the Bruhat Bengaluru Mahanagara Palike (BBMP) in a bid to rake in more revenue, proposes to hike various taxes in the city.

From next year residential taxes will be hiked by 25% and commercial by 30%. BBMP Commissioner N Manjunath Prasad has sent the proposal to the BBMP’s Tax and Finance committee for approval.

The Commissioner has also proposed to amend the Karnataka Municipal Corporation Act, 1976 to introduce a double tax to property owners who deviate from the original building sanction plans.

BBMP is even mulling to introduce land transport cess on property tax, which was introduced in its agenda during the council meeting in August. However, neither the ruling party nor the opposition took up the issue for discussion.

With a pending bill of Rs 15,428.67 crore for contractors, Prasad had also written a letter to the Urban Development Department (UDD) in September to bring the BBMP under the ambit of Karnataka Local Fund Authorities and Fiscal Responsibility Act, 2003 to restore financial discipline in the organisation.

While this comes at the heels of the ban on advertising through flex and banners, Prasad said, “Though the ban is pinching our revenues, the hike in property tax is in accordance with the KMC Act provisions, which allows the BBMP to increase it  once every three years.” 

According to the BBMP budget estimation for the year 2018-19, the civic body would receive up to Rs 1,255 crore. Though the civic body can still collect taxes from bus shelters and skywalks, it is speculated that by imposing these hikes they can recover more funds.

The BBMP has also planned to amp up the non-tax sources, such as levying entertainment tax and increasing the penalty for unauthorised optical fibre cables etc.

“In order to boost our revenue, we have tied up with organisations such as Indian Space Research Organisation (ISRO) for effective property tax collections. However, the move to lay double tax for unauthorised buildings is basically to curb illegal constructions in the city,” said Prasad.