June 18, 2021 12:59:51 am
A day after the BMC proposed a hike in property tax, Mumbai Mayor Kishori Pednekar on Thursday said the proposal will not be cleared as people are already facing financial hardship due to the lockdown.
Speaking to mediapersons, Pednekar said: “The proposed hike in property tax will not be implemented. Although Covid-19 cases have dipped, the situation is still not normal. People have lost jobs and the economy has been affected. Considering that there will be no hike in property tax.”
Corporators have claimed that the proposal to hike property tax has been moved by bureaucrats running the BMC and most elected corporators are not in favour of it. Corporators, especially those of the ruling Shiv Sena, believe that a hike at this time could antagonise voters with BMC elections slated to be held next year.
On Wednesday, the BMC’s assessor and collector department had tabled the proposal – to be in force from April 1, 2021 to March 31, 2025 – before the Standing Committee for final approval. The BMC had proposed to increase property tax based on ready reckoner (RR) rates as on April 1, 2021. Officials said that this will increase the current property tax rates up to 14 per cent.
RR rate is the minimum value of property set by the government. It helps calculate true market value of immovable properties – be it land, residential, commercial and industrial.
Officials have clarified that the new rule will not impact houses up to 500 sq ft in size. If the proposal is passed, BMC is hopeful of collecting about Rs 1,000 crore as additional income.
However, the proposal was kept on hold after leader of opposition Ravi Raja opposed the move and asked for more time for study it.
The last time property tax rates was revised was in 2015. As per the amendment in the Mumbai Municipal Corporation Act, revision in assessment of property tax can be done every five years. Officials said if the proposal is rejected, they will have to approach the state government for another amendment in the Act.
The fresh revision was scheduled for 2020-2025 but BMC had decided against it last year in view of the pandemic. According to the Act, with the revision, BMC can increase property tax up to 40 per cent.
As per the proposal, however, BMC will not revise property tax rates from 2021-2025, as a case is pending before the Supreme Court and its outcome could affect revision rules.
The traders body has opposed the BMC’s move. “Need of the hour is to revive RR rates as rates of property are decreasing in many areas due to recession and lack of liquid crunch amid the pandemic. The BMC should think of giving rebate in property taxes on commercial property of businesses, which have largely suffered, like shops, offices and the hospitality sector,” said Viren Shah, president of Federation of Retail Traders Welfare Association.
“We suggest the state government should come out with stricter laws to collect outstanding taxes from defaulters rather than taxing extra for those who regularly pay their property tax,” he added.
Godfrey Pimenta of Watchdog Foundation has also opposed BMC’s proposal.
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