Mumbai: Parties cause Rs 180 crore loss to exempt votebank from property tax

When it comes to votes, political parties can go to any lengths even blowing a big hole in the exchequer. Corporators in the BMC came together on Friday to exempt nearly 8 lakh tenements from paying property tax next year, causing a substantial loss of revenue to the civic body.

The civic body had put up a proposal to calculate property tax based on carpet area, as opposed to its earlier formula of computing it based on built-up area. This new proposal was passed on Thursday and will cause a 14 per cent increase in property tax for Mumbaikars next year.

mid-day had reported that the new formula would result in lesser revenue for the civic body Rs 4,683 crore as opposed to Rs 5,077 crore it would’ve raked in had it stuck to its old formula. Now, a loss of Rs 180 crore has been added to this.

The new formula had included homes admeasuring 500 sq ft or less under the taxable bracket. These tenements had been earlier excused from paying tax when the formula was revised in 2013 and applied in retrospective from 2010 — effectively exempting them from paying property tax for five years (2010 to 2014).

However, the Shiv Sena-led BMC, ally BJP and even opposition Congress spoke in one voice against the inclusion of these smaller homes. Trushna Vishwasrao, Sena corporator and also the leader of the house in the BMC, asked for this exemption to be extended for the next five years too.

BJP's Manoj Kotak supported this move and even Congress's Pravin Chheda echoed these sentiments. A senior BMC official said these homes in question are largely the chawls in Girgaum, Lower Parel, Worli, BDD chawls and ground-plus-three storey structures, which have a sizeable Marathi population.

This is a vote bank for all parties and none would dare go against them. “Whatever the House of the BMC passes is a suggestion. The exemption for small homes will be added (to the proposal). The new tax proposal will go to the state government and they will take a final decision on it,” said a senior BMC officer.

The state government, too, is unlikely to differ on this issue, as both ruling parties in the BMC are also in state government. With a view of the 2017 BMC elections, nobody wants to disappoint this voting population.

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