Karnataka: BBMP to replace self-declared property tax regime?

To ensure optimal tax collection in face of funds crunch faced by the Karnataka government, the Bruhat Bengaluru Mahanagara Palike (BBMP) is set to replace the self-declared property tax regime with an alternative system.

Deputy Chief Minister DK Shivakumar, who also holds the Bengaluru Urban Development portfolio, speaking to Republic, said, “The tax collection in Bengaluru city was not satisfactory. There is a self-declared property tax regime with an annual income of just Rs 3,000 crore."

Shivakumar’s statement points to the sorry state of financial affairs in the state in light of funding the five guarantees. The lack of funds have put a brake on the developmental works in the city, making even Congress MLAs unhappy.

Aland MLA BR Patil had written a letter about the lack of funds to the CM earlier. Speaking to Republic on July 25, he had said, "There is shortage of funds for carrying out developmental works in our constituencies and therefore we have written a letter to CM Siddaramaiah to address the issue. As I'm an elected representative, people of my constituency are questioning me about pending development works."

Commercial complexes being built in the name of residences: Shivakumar

DK Shivakumar, speaking to Republic, further added, “We trusted people, but citizens are not declaring the full income they make on their assets in the self-declared property tax regime. They are constructing commercial buildings with permission for residential purposes and paying less taxes. Therefore, we are thinking of collecting tax it in a new way. There should be 100 per cent tax collection. Door-to-door inspections will have to be done in this regard."

Deputy Chief Minister DK Shivakumar, who also holds the Bengaluru Urban Development portfolio, told Republic that the tax collection in Bengaluru was not satisfactory.

Dy CM DK Shivakumar has highlighted the basic problem plaguing BBMP and the government for decades, where commercial buildings are being built in plans sanctioned for residential complexes, which also highlights the fact that there has been discrepancies in sanctioning of plans and corruption at department level.

A BBMP official from the planning section on condition of anonymity said, “Influential people exert their muscle power and arm twist the government into sanctioning plans for much less than what the land value holds. This has been highlighted now and again, but there are no solutions which governments have worked towards. The advice and recommendation by Dy CM is most welcome because door to door inspection will solve 50 per cent of the problem, but it needs to be seen as to how the Herculean task will be carried out in terms of logistics and manpower."

Government buildings and establishments not to be spared: Govt

There was a letter addressed by the state government to departments in the state government buildings for not paying taxes. The centrally owned firms had outstanding dues. Now the Dy CM has written a letter asking them to pay taxes and clear the outstanding dues.

DK Shivakumar inspecting the developmental work in the city.

BJP cries foul at government's move

With respect to the new form of proposed tax to be levied, the saffron party has called out the government for allegedly burdening the people of Karnataka even though a new framework and guidelines are yet to be formed.

BJP MLC Chaluvadi Narayanaswamy, speaking to Republic, questioned the double standards of the government and said, "The same Congress party opposed CGST and GST at every given opportunity. Now what is this new form of property tax that they want to introduce? The government is looking at ways to garner more funds because they are cash-strapped because of funding guarantees. These guarantees are drowning the finances of the state and piling more misery on the people."

The tax collection in Bengaluru has always been at record levels and been the second highest after Mumbai in the entire country. Is that sum not enough to undertake developmental work is something the government needs to answer. Another question that arises is that are the funds being diverted by the government for guarantee programmes.

If there is mismanagement and corruption in the plan sanctioning department causing loss of revenue to the state government, then the government needs to look into the matter and see how soon the system can be implemented in case the current self-declared tax system needs to be tweaked.