For revenue increase: KMC mulls tax cut or waiver for commercial establishments

KOLKATA: In a bid to increase its revenue, the Kolkata Municipal Corporation (KMC) is considering the idea of either reducing tax or offering a tax waiver for commercial establishments, hoping it will make up for the substantial dues in property tax.

In a bid to collect large amounts of property tax dues from defaulters, the KMC, in 2022, conceptualised the idea of a WhatsApp chatbot facility that allows citizens to deposit property taxes via mobile App.

According to KMC sources, the civic body has now come up with the plan to instead reduce or offer a tax waiver on commercial establishments to ensure steady influx of revenues. Sources said that the proposal was drawn up at a Member Mayor-in-Council meeting and will be forwarded to the state Secretariat for approval.

The decision by the civic body also comes in the wake of commercial establishments in the city reeling under property tax burden. Previously, a proposal was placed to form a committee comprising chief municipal law officer, chief municipal auditor, chief revenue managers etc. to specifically review the final Base Unit Area Values (BUAV) of properties.

Under the Unit Area Assessment (UAA) method of property tax evaluation, wards are divided into blocks using a statistical method and these blocks are further categorised into one of seven categories (A, B, C, D, E, F and G with A being the highest and G being the lowest category.)

Each of these seven categories is assigned a particular BUAV which is the specific initial annual value per sqft. for properties situated within a block having a specific category.

KMC data reveals that if two areas, such as Park Street and Alipore, fall in blocks with the same categorisation level, then even though they are located in two different wards, all properties located in these two areas will have the same BUAV, and under all circumstances, the same BUAV will be higher compared to a property located in an area, which may have been categorised at a lower level on account of its level of development, availability of infrastructure, etc.

This system of categorisation and uniformity in BUAV within the same category brings about a kind of macro-level equity in valuation across the city.

The KMC had switched to the UAA system since the former Annual Rateable Value method lacked scientific and regulatory guidelines for arriving at the reasonable rent of a property depending on its location, characteristics and usage.