But Karnataka govt sets Rs 4,800-crore revenue target for BBMP for fiscal 2022-23
Anticipating the unpopularity of hiking property tax in the run-up to BBMP elections this year, the BJP state government has, much to the relief of 18.85 lakh property taxpayers of Bengaluru, held back from any increase in property tax for the financial year 2022-23.
The decision comes despite two proposals pending before the Urban Development Department to enhance property tax by collecting a 10% Solid Waste Management cess (user fee) to match the expenditure or to collect the cess via the electricy bills of Bescom.
On Thursday night, the BBMP shared its 2022-23 budget copy in the WhatsApp media group and published the same copy on the BBMP website, wherein there is no mention of enhancement of property tax.
BBMP has collected a record Rs 3,000 crore in property tax for the financial year 2021-22, and it has targeted a property tax collection of Rs 3,848 crore for fiscal 2022-23.
Pre-BBMP poll decision
Sources in the BJP circles say the government is geared to conduct elections to BBMP’s 243 wards once the ward delimitation exercise is completed. In view of this, the BJP government has dropped the idea of enhancement of property tax but has set a revenue target of Rs 4,800 crore for 2022-23.
As per the budget estimates, BBMP has a target of collecting property tax of Rs 3,848 crore, comprising property tax Rs 3,107 crore, service charge in lieu of property tax Rs 45 crore, health cess Rs 466 crore, SWM management cess Rs 60 crore and interest on arrears of property tax Rs 150 crore.
This apart, it is also expecting revenue through stamp duty surcharge collected by the state government, khata certificate and khata extract fees, khata transfer fees, hawking fees, improvement charges, advertisement tax on hoardings on BBMP land and private land, advertisement tax on bus shelters, advertisement tax on skywalks, advertisement fee on vehicles, advertisement fee on LED displays and others.
Property tax hike in pipeline
Meanwhile, BBMP’s two proposals to collect SWM cess are in the pipeline and are lying before the Urban Development Department’s Additional Chief Secretary Rakesh Singh, who is yet to take a final call on the issue. If he decides to greenlight the proposal of BBMP, enhancement in property tax is expected to come into force from the next financial year, 2023-24.
The proposal to collect 10% SWM cess to match the expenditure is one of the two proposals on the issue. Said a source, “We have to collect the user fee to meet the huge expenditure. We may also think of increasing the cess to 10% of property tax. As per section 143 of the BBMP Act 2020, levy of cesses like SWM cess can be at a rate not exceeding ten per cent of the property tax as notified by the government on every owner-occupier of the land or building, or both, in the city for collection, transportation and disposal of solid waste, and different rates may be prescribed for different classes of lands or buildings or different areas.”
The other SWM-related proposal is to use the agency of Bengaluru’s power distribution company Bescom to collect the cess on the basis of power consumption in both residential and commercial properties.