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Innovative taxes may fetch BMC Rs 5 crore

HAVING VIRTUALLY exhausted conventional tax avenues, the Bhopal Municipal Corporation (BMC) has introduced half-a-dozen innovative tax measures, which are likely to fetch the corporation Rs 5 crore.

india Updated: Feb 06, 2006 15:22 IST
Anil Dubey

HAVING VIRTUALLY exhausted conventional tax avenues, the Bhopal Municipal Corporation (BMC) has introduced half-a-dozen innovative tax measures, which are likely to fetch the corporation Rs 5 crore. The fund-starved BMC had Rs 36 crore collection last year. This year’s target is Rs 45 crore. However, earning through new proposals might take some time.

The civic authorities have adopted the policy of widening the tax net by introducing new taxes under the ambit of the Municipal Corporation Act. Recent changes in the definition of ‘commodities’ in the Act has enabled the BMC to impose at least two new taxes — on the waves and signals sent by the telephone and power companies.

This tax imposed in the shape of ‘Bazaar fee’ would be one per cent of total business done inside the BMC’s limit. Tax on waves is likely to earn the BMC about Rs 3 crore. The authorities included three more items in the export tax net. The administration had proposed inclusion of seven items but the BMC Council deleted four from the list.

Now, banks would also be charged for running ATMs in the BMC limit. The Indore Municipal Corporation has already introduced this tax. The banks will have to pay an amount of Rs 12,000 per year for every ATM. Moreover, there would be more tax on telecom companies as the BMC has imposed a rent of Rs 20,000 per year on every mobile company tower. This would bring an earning of about Rs 25 lakh per year.

Another tax has been proposed on the glow signboards installed by different companies at their outlets and kiosks for advertising. However, real problem is to realise these taxes due to shortage of stops.

“When the BMC authorities have failed to cover all the properties or water tap connections in the tax net, how would it realise new taxes? The realisation of property tax and water tax have been low despite increasing population’, said an official.

However, the BMC authorities feel the main reason behind this problem is shortage of revenue collection staff. Besides, the BMC council has disapproved the proposal of realisation of certain taxes through private contractors.

When asked, the BMC additional commissioner Vaid Prakash said that there was need of more taxes to increase revenue collection. “We are exploring new ways to generate income. Besides, the efforts are being made to enhance the property tax and water tax collection”, he said.

He said that new paid parking lots are being developed in MP Nagar and other areas. Vaid Prakash also suggested that there is need to outsource the realisation process.