Delay in vacating a stay order issued by High Court on the proposal of Bhubaneswar Municipal Corporation (BMC) to hike Holding Tax has thwarted the BMC’s attempt to enhance revenue generation.
The BMC had attempted to hike the Holding Tax for residential units in the city in December, 2010. The tax is calculated on the basis of three categories of dwelling units - residential, commercial and residential.
When BMC proposed to hike the Holding Tax valuation for residential units in 2010, a group of residents had filed a case in the High Court against the proposal. A stay order was issued by the HC to halt the proposal.Currently, the residential units are paying Holding Tax based on the land valuation determined by General Administration (GA) in 1998. The owners of residential units pay anything between 25 paise and 30 paise per square feet per annum.
BMC tax officials said ideally, based on the current land valuation, the Holding Tax rate should be between `2 and `3 per square feet per annum.
Had the hike been implemented in 2010, the annual Holding tax collection would have shot up by at least three times by now. The residential units cover about 80 per cent of the city. The Holding Tax for the commercial holdings is revised on a regular basis.
A senior BMC official said adequate steps were not being taken to vacate the stay order issued against the hike. After the Octroi Compensation Grant (OCG), Holding Tax is the second highest revenue generator for the BMC.
Even the Property Tax Bill, incorporated in the Odisha Municipal Corporation Act in 2007-08, has not been approved by the State Government till date.
The Bill was referred to the Select Committee of the Assembly.