EDITORIAL | Property tax hike plan unacceptable

The Bruhat Bengaluru Mahanagara Palike’s (BBMP) proposal to increase the tax on residential and commercial properties by 25% and 30%, respectively, from April 2019 is totally unjust, excessive and unwarranted, especially when the civic body has woefully fallen short of providing basic amenities to citizens. The BBMP justifies its move on the ground that the Karnataka Municipal Corporation Act mandates it to revise the property tax every three years. Taxes were last increased in 2016. The corporation also intends to extract its pound of flesh from citizens as taxes were not hiked, for political considerations, in 2008-09 and 2013-14 in view of assembly elections in Karnataka, leading to a shortfall. This tendency of the political dispensation to offer sops on the eve of elections and then recover the amount in double the measure later is unacceptable.

Also read: Property owners up against BBMP's proposed tax hike

Before burdening the common man, BBMP should first set its house in order by improving the efficiency of tax collection. According to the Finance Ministry’s Economic Survey 2016-17, BBMP has the potential to collect up to four to seven times the existing property tax, that is an average of Rs 6,500 crore a year. GIS mapping has identified 19 lakh buildings, of which nearly five lakh evade payment of property tax. The major factors contributing to poor realisation are weak collection practices and flawed methods for property valuation, including rampant undervaluation with the connivance of corporation officers. A recent survey of large structures revealed that the civic body had suffered a loss of Rs 350-400 crore as the carpet area was fudged. As against the budgeted property tax collection target of Rs 2,600 crore for 2017-18, the BBMP managed to raise only Rs 1,655 crore, a deficit of nearly 40%. Tax collection also saw a fall compared to the previous two fiscals.

While the corporation may be justified in seeking a marginal increase, a hike of 25-30% may not be in order unless citizens receive civic services commensurate to the taxes that they pay. Today, the BBMP is a white elephant which has not been able to discharge even a single responsibility satisfactorily: garbage clearance, disposal and waste management are a total mess; roads are filled with potholes; footpaths are non-existent; and drains are clogged, leading to flooding during rains. Instead of targeting the honest taxpayer, the corporation should mop up resources by bringing defaulters to book and by collecting arrears amounting to crores of rupees from them. Citizens cannot be expected to subsidise BBMP’s incompetence forever.

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EDITORIAL | Property tax hike plan unacceptable

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