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BMC turns to MU for a model to tax slums

Estimates additional annual revenue of Rs 1,000 cr once it starts taxing slum properties from 2016 .

Written by Tanushree Venkatraman | Mumbai | Published: January 22, 2015 12:45:12 am

The Brihanmumbai Municipal Corporation (BMC), which plans to tax slum properties in the city from 2016, has approached the Mumbai University’s (MU) economics department to undertake a study and create a model to levy such taxes.

Revenue collection from slum areas, which house over 60 per cent of the total population in the city, is estimated to bring about Rs 1,000 crore to the civic body’s exchequer.

Apart from researching on probable methods of taxing slum properties, MU is also expected to study taxation models for slums in other parts of the world. The civic body has also roped in a private agency for a pilot project to map slum properties across the city.

While developing the financial model, MU will not only have to see how taxes can be implemented based on factors like plot size and market prices, but also assess the quality of civic amenities provided by the BMC. “This includes an assessment of the current drainage system, the road condition and water connections, which will help MU to suggest a model for us. We will take a final decision after discussions,” said Ramesh Arote, assessment and collector of the civic body.

The study will be headed by professor Abhay Pethe and his colleagues from the university.

Civic officials said that since establishing the model would take some time, the BMC planned to begin the actual taxation process only from 2016. “It will take six months for the study, followed by another six months for the actual implementation of the new system,” Arote said.

As part of reforms to be undertaken under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM), the BMC had committed to the Centre in 2006 that it would bring all protected slum properties under the tax bracket from April 2007 onwards.

A senior civic official had earlier said that less than five per cent of the slums in the city had been assessed to date, leading to the delay.

“We are waiting for the data from the BMC’s side before we start working on the tax model. Currently, we have received data for G/North (Dadar) and begun studying the figures,” Pethe said.

The unassessed slum properties were excluded from the tax net when the BMC switched over from rateable value of taxation to the capital value in April 2010. But now with the taxes under the newly adopted regime set to be revised again from April 2015 onwards, the civic body has decided to initiate the exercise to tax slum properties.

The revision under the newly adopted regime is expected to be tabled before the standing committee of the civic body for approval next week.

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