Property tax hike a hot potato for BJP

With the financial year of 2011-12 just around the corner, the BBMP is bound by the Karnataka Municipal Corporation (KMC) Act of 1976 to increase the property tax by a minimum of 15 per cent.
But the BJP and the bureaucracy are at odds over the hike, the ruling party dreading a hike, and the BBMP Commissioner wanting an increase considering the parlous state of the Palike’s finances. The issue might just lead to another face-off between the Mayor and Commissioner, who declared a ceasefire a few days ago. 

According to the BBMP Commissioner Siddaiah, the proposal to hike the property tax has already been sent to the Palike Revenue Department for its consideration. The draft on the revision of the property tax is later scheduled to be presented to the Taxation and Finance Committee for its approval and subsequently placed before the  council for its ratification.

“The amendment to Section 108 of the KMC Act 1976 enables the BBMP Council or the BBMP commissioner (in the absence of elected council) to revise the property tax from minimum of 15 per cent to a maximum of 30 per cent once in three years,” says Siddaiah. The hike implies an increase in the zonal Guidance Value and a resultant rise in the self assessed tax.

However, negating the proposal, Standing Committee Chairman for Taxation and Finance P N Sadashiva said it was not feasible for the BJP to increase the property tax at this  juncture. “We will recommend to the State Government for amending the Act and ensuring that the property tax revision is relaxed for a period of five years. And this revision will be bare minimum to ease the burden on the citizens,” he said.

Sources say the BJP is not pushing for a property tax hike  as this is the first time they have come to power at the BBMP. “We cannot take this to the people in our first year of forming the majority in the BBMP,” said a BJP leader.

Ironically, Section 108 of the Act was amended during the tenure of Commissioner S Subramanya to reduce the time frame for revision of property tax from five to three years.

Mayor S K Nataraj said he was not aware of the topic and will have to have look into the matter. The BBMP has so far collected a property tax of Rs 985 crore and by the end of March it is expected to reach 1,000 crore. However, this target can very well quadrapule if the 15 per cent hike is implemented.