[mpisgmedia] Deadly hike- property tax rationalisation in Pune and Mumbai (old properties only?)

*LETS ABOLISH THE OCTROI AND JUST HIKE THE PROPERTY TAX THIS IS A DIRECT
FALL OUT OF JNNURM CONDITIONALIITIES *
**
*what about the citizens was this discussed in the CDP consultatiions. What
is the use of these"experts" who remote control the politics of taxation...
Vinay
*

FOR PMC COMMISSIONER, IT'S ABOUT RATIONALISATION

*BMC chief not for property tax increase*
*Prasannakumar
Kesar*<http://www.expressindia.com/about/feedback.html?mailto=vvdeshmukh@xxxxxxxxxxxxxxxx>

*Pune, August 18:* The Study Group set up by the state to find ways and
means of finding alternative sources of revenue to compensate for the loss
from octroi may have proposed a steep increase in property tax, but one of
its own members has put up a dissent note.

And it has come from the Brihanmumbai Municipal Corporation (BMC)
commissioner Johny Joseph, who unlike his counterpart in Pune — Nitin Kareer
— has expressed reservations on the proposals.


While Kareer has called it ''a rationalisation of tax structure'' and said
it would affect only old properties in downtown parts of the city, Joseph
has made it clear in his note that the tax increase will not bring in any
additional revenue to the BMC and thereby it was not advisable to abolish
octroi.

The Study Group has proposed 153 per cent increase in property tax for Pune
and 103 per cent for Mumbai under the assumption that without revision of
rates, the tax receipts would have an annual growth of only 5 per cent.

But Joseph stated that octroi contributes 40 per cent of his corporation's
total revenues — Rs 2,852 crore for 2005-06 as compared with Rs 1,400 crore
from property tax — and is the only ''buoyant source of income showing a
robust annual growth of 15 per cent''.

Incidentally, Pune's octroi revenue had shown a growth of 32 per cent in
2005-06.

Kareer, on the other hand, told the panel that in Pune, ''more than half the
properties in the city pay property tax of less than Rs 500 per annum''.

It is not only on property tax, but even on additional levy on VAT and
profession tax the BMC commissioner has disagreed with the panel's views
that all these will help in compensating the revenue from octroi. The
reason: There is no guarantee that the alternative heads suggested will be
able to bridge the octroi revenue.

Joseph has also another problem in hand. The BMC has decided to undertake Rs
5,800-crore infrastructure projects in the city and has sought 50 per cent
financial assistance from the Centre under the Jawaharlal Nehru National
Urban Renewal Mission (JN-NURM), while the rest it hopes to raise through
loans and bonds.

''Abolition of octroi and uncertainty about the success and acceptability of
the suggested alternatives will jeopardise the credit-worthiness of the
corporation to raise loan for these projects,'' he has said.

Pune has also pitched for Rs 8,000-odd crore under the JN-NURM, but Kareer
says it is ''rationalisation of user charges for services like water supply
that is mandatory''.

Joseph has also pointed out that these recommendations would affect a much
larger cross-section of citizens and would be resisted. What he has
suggested is to try out these experiments in small metropolis and after
removing the demerits implement it in a phased manner elsewhere.

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