BMC proposes tax on commercial structures in slum areas amid declining property tax revenue

Mumbai: The BMC, which has long depended on property tax as its primary source of revenue, has seen a decline in collections in recent years. To address this financial shortfall, the BMC is now looking for alternative revenue streams by proposing a tax on commercial structures operating within slum areas. However, the plan has not been formalized yet, with its progress hampered due to the recent Lok Sabha elections in May and the impending state assembly elections.

As a result, the proposal remains in limbo, with the BMC waiting for a more stable political environment to pursue its revenue-boosting measures.

The revenue collected from the appropriate tax contributes to funding infrastructure projects in the city. However, in recent years, there has been a steady decline in property tax revenues, with a shortfall of Rs. Fixed deposits worth Rs 10,000 crore in the last 2.5 years.

To compensate for some of the losses, the BMC plans to impose property tax on commercial units in slum areas depending on the size of the property. Civic sources said that in March, an intensive survey was conducted to identify and document commercial units in slum areas, with the aim of formally including them in the tax regime.

Earlier in 2016-2017, BMC had considered imposing tax on slum dwellers. At that time, the BMC had proposed to collect annual property tax ranging from Rs 2,400 to Rs 18,000 depending on the area and type of slum. The then BMC Commissioner Ajoy Mehta had also included a proposal to impose tax on slum properties in the budget.

However, the civic body did not move ahead with any of these plans. At present no tax is being taken from slum dwellers. However, BMC is now considering imposing tax on commercial properties in slum areas.

“Some old commercial structures in slum areas already pay property tax, but many new units have been built in recent years. Assessors and collection department officials will visit these properties, collect necessary information, and then pay those However, since it was an election year, the process is not expected to be expedited after the state assembly elections. It will charge a service charge of Rs 100 from commercial and Rs 250 from commercial.