Facing a dearth of funds and tasked with generating the revenue it needs, Ranchi Municipal Corporation (RMC) is planning to modify its holding tax norms after 23 years. With the objective to become self-sufficient in monetary matters, the move is expected to support the ongoing and upcoming public service projects undertaken by the urban local body.
But the proposal has to face criticism from the taxpayers, and even ward councillors at one point of time. Given that the reformed tax rates are to be assessed on
the basis of current income levels of holding owners and not those in 1992, they are worried about new holding taxes burning a hole in their pockets.
However, RMC functionaries claim these fears to be result of misconceptions. “Actually, we are trying to alleviate the burden on taxpayers. Taxes accompanying holding tax like water tax, latrine tax and educational cess have not been included in the new format, bringing holding tax percent down to 2.5 per cent from 43.75 per cent. Only the tax rates have gone up as they have been assessed based on the present income levels,” stated RMC Municipal Commissioner Prashant Kumar.
Keeping the classification of residential structures unchanged – those with RCC roofs, with asbestos or corrugated sheet roofs and others – they have been further categorised on the basis of streets in front them, Principal Main Roads (40 feet wide or more), Main Roads (20 to 40 feet wide) and Other Roads (width below 20 feet).
Residences in slum areas built over 250 square feet or less have been exempted from paying holding taxes. Additionally, holding owners who pay their annual taxes by June every month will be given five per cent discount in holding taxes.
“Building owners on Principal Main Roads will have to pay three times old holding tax. Taxes for Main Roads will increase by 2.5 times and Other Roads will be twice the previous taxes. This increase will help in augmenting Corporation’s income,” stated Kumar.
As per an estimate, the renewed holding tax pattern will generate revenue to
the tune of `40 crore, against the `10 crore which the
urban local body presently acquires from 98,000
holdings in Ranchi. Focus now should be on streamlining the tax collection process, Kumar added.
After initial differences on the matter, the ward councillors are also supporting the proposal. “More revenue is required for executing public service works in the city and increase in holding taxes will help with that. As for tax collection, we will devise plans to make sure that most of the holding taxes are collected under the new formula with least confusion,” stated
Ward 25 Councillor Mohammad Aslam.
The proposal is to be tabled once again at the upcoming RMC board meeting on Wednesday. “Consent of all the stakeholders will be taken into consideration during this meeting before approving the proposed holding tax structure,” said Mayor Asha lakra.