Towering debt: Over 6,000 crore tax pending from local bodies in Karnataka

Most of the mobile towers, windmills, private power plants and others, due to the problems associated with tax collection, have not paid any taxes to the state.

Published: 16th July 2018 05:53 AM  |   Last Updated: 16th July 2018 05:53 AM   |  A+A-

Image used for representational purpose only.

Express News Service

BENGALURU: At a time when the massive farm loan waiver is expected to pile on debts on the state government, taxes in excess of Rs 6,000 crore remain to be collected from local bodies in the state. Despite the state’s keenness to tap this revenue source, several complications have prevented it from doing so.

Most of the mobile towers, windmills, private power plants and others, due to the problems associated with tax collection, have not paid any taxes to the state. In order to encourage local bodies to collect the pending dues, the state is mulling to introduce performance grants for gram panchayats and other local bodies, sanctioned based on the rate of tax collection.

However, lobbying by private companies with local bodies might hamper any expected progress in tax collection.According to data,  of the 10,671 mobile towers in Karnataka, taxes have been collected for only 3,159 - 29.6 per cent - of them. In Chamarajanagar for instance, tax collection from mobile towers is zero per cent, as none of the 348 towers spread across the district has been taxed by local bodies.

Similar trends can be observed with respect to taxation for windmills, private schools, private power plants and others.In a three year period between 2015-16 and 2017-18, the state has been able to collect approximately 20-22 per cent- Rs 767.21 crore- of the total tax demand of Rs 3,566.88 crore.

Speaking to The New Indian Express, Kota Sreenivas Poojary, Opposition leader in the Legislative Council - elected from local bodies - said that there was a regional disparity in taxes collected.“While districts like Dakshina Kannada have a tax collection rate of 70 per cent plus, tax collection rate in Kalaburagi district is 0.27 per cent,” he said.

“Though government estimates that pending tax collection in excess of Rs 6,000 crore, it could easily be twice the number if all properties are verified and taxed accordingly,” he added.

Rural Development and Panchayat Raj minister Krishna Byre Gowda said recently that taxes were pending due to the lethargy of local bodies.“We will regularly review the progress of tax collection. Currently, only about 17 per cent of all the taxes is collected. In order to encourage tax collection in such local bodies, the government is proposing performance grants based on tax collected to gram panchayats, along with the statutory grants sanctioned to these bodies,” he said.

CEO of a zilla panchayat in the state, under the condition of anonymity, said that though the local bodies can collect taxes, they often collude with private parties who install the machinery in any gram panchayat limits. “Though some installations, such as windmills have to pay a fixed tax of around Rs 50,000 to Rs one lakh, the companies who install them deal directly with gram panchayat members who have powers to fix tax rates as they see fit,” he said.He said that increasing tax collection was dependent on the political decisions made by local bodies.

Stay up to date on all the latest Bengaluru news with The New Indian Express App. Download now
(Get the news that matters from New Indian Express on WhatsApp. Click this link and hit 'Click to Subscribe'. Follow the instructions after that.)


Disclaimer : We respect your thoughts and views! But we need to be judicious while moderating your comments. All the comments will be moderated by the editorial. Abstain from posting comments that are obscene, defamatory or inflammatory, and do not indulge in personal attacks. Try to avoid outside hyperlinks inside the comment. Help us delete comments that do not follow these guidelines.

The views expressed in comments published on are those of the comment writers alone. They do not represent the views or opinions of or its staff, nor do they represent the views or opinions of The New Indian Express Group, or any entity of, or affiliated with, The New Indian Express Group. reserves the right to take any or all comments down at any time.

flipboard facebook twitter whatsapp