Mumbai: BMC Proposes Tax On Commercial Structures In Slum Areas Amid Declining Property Tax Revenue

Mumbai: The BMC, which has long relied on property tax as its primary source of revenue, has witnessed a decline in collections in recent years. To address this financial shortfall, the BMC is now seeking alternative revenue streams by proposing a tax on commercial structures operating within slum areas. However, this plan has yet to be formalised, with its progress hampered by the recent Lok Sabha elections in May and the looming state assembly elections.

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

The revenue collected from properly tax contributes for funding infrastructure projects in the city. However, in recent years, there has been a steady decline in property tax revenue, along with a reduction of Rs. 10,000 crores in fixed deposits over the past 2.5 years.

To recover some of the losses, the BMC plans to levy property tax on commercial units in slum areas based on the size of the property. In March, a thorough survey was conducted to identify and document the commercial units in slum areas, with the goal of formally including them in the tax regime, said civic sources.

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

However, the civic body did not proceed with either of these plans. Currently, no tax is being collected from slum dwellers. However, the BMC is now considering imposing a tax on commercial properties in slum areas.

"Some of the older commercial structures in slum areas already pay property tax, but several new units have been built in recent years. Officials from the Assessor and Collection Department will visit these properties, gather the necessary information, and then propose levying taxes on them. However, since it was an election year, the proposal did not make much progress. The process is expected to speed up after the state assembly elections," added civic sources. Till 2006-07, BMC would collect a service charge of Rs100 from residential slum structures and Rs250 from commercial per year.