With octroi set to go, civic body to focus on other revenue sources

Unable to predict the possible impact of abolition of octroi, the Pune Municipal Corporation (PMC) has decided to focus on effective implementation of other revenue sources to make up for any possible shortage in revenue collection after the implementation of local body tax (LBT). Octroi will be abolished from April 1, both in Pune and Pimpri-Chinchwad, to be replaced by LBT.

"The possible change in revenue collection from LBT will have its reflection on the implementation of annual civic budget. Now, the PMC was considering octroi as a major revenue source and in case of LBT replacing it, it would consider the same amount in the budget for the next financial year," said Ulka Kalaskar, PMC chief accountant.

PMC's octroi revenue Rs 1,600 crore is the major contributor to the budget with property tax and building permission coming next. The PMC also gets revenue from licences and permissions by health department to commercial properties and hospitals, parking charges by traffic planning department, penalties on selling plastic bags, failure to segregate garbage and other various means.

"There is no precedence so it is difficult to judge the possible impact of replacement of octroi with LBT. It will take time to ascertain on the possible revenue expectations from LBT. However, other revenue sources will have to be strengthened to increase revenue," she said.

Kalaskar said the PMC cannot increase new revenue sources, but will have to ensure proper and effective implementation of the existing sources. "The departments that contribute to civic revenue through some or the other way will have to work hard and implement the rules strictly," she added.

The PMC has been losing a large amount of revenue due to failure in assessing the properties on time and the existence of large number of illegal constructions. Elected representatives had demanded the civic administration to bring all the structures in the city under property tax net, instead of increasing the tax rates for properties already in the tax net. The administration efforts to identify properties that remain unassessed for tax by seeking citizens help or appointing an agency have failed to get good response.

"PMC is supposed to get money from licences issued to commercial structures as per the business in the property, but many such commercial structures are out of the tax net and run without valid PMC nod," said a civic officer.

The civic body has also rented out its various properties to organisations and citizens, but the PMC has no updated record of its properties and the amount of rent charged is minimal, leading to reduction in revenue collection compared to market rate.

The PMC initiative to carry out tender process for issuing advertising licences revealed that the civic body was losing large amount of revenue by not following the tender process in the past.

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