Move for higher civic taxes to bail out Shillong Municipality Board

SHILLONG, April 13: While MeECL is gasping for breath, on a lesser scale another public institution — Shillong Municipal Board — has been in the red for over half a century. Unable to meet two ends, it has been on financial ventilation which the government of the day has been compelled to provide. With the state finances itself in doldrums, desperate search is on to find alternate source of sustenance.
What better than raising the taxes and turning to central agencies for coming to its rescue?
In the recently concluded budget session of Meghalaya Assembly, a bill was passed to empower municipalities in the state to levy enhanced rate of taxes on all private buildings standing within the municipal areas. The bill, which was adopted without any amendment, ostensibly aims at giving the civic bodies more wherewithal for providing better health and sanitation to the rate-payers, besides making provision for good civic infrastructure. But there is another compulsion for such an enactment. The State Government aims to garner outright grants from the 15th Finance Commission. But there is a catch. The Commission stipulates that all urban self governments like SMB must have made tax reforms to become eligible for such doles. In other words, the condition is: first exhaust your own internal sources and make the beneficiaries pay a fair share of taxes. Hence the Bill.
It is a different story altogether that the Bill was adopted without any debate, let alone amendment. Opposition made a half-hearted attempt to refer the bill to a select committee which was bull dozed by the ruling conglomerate. Be that as it may, the fact  is that today the government has enabled the SMB to revise its tax structures commensurate with the prevalent market rate.
The oldest civic body of the northeast, SMB has a monthly revenue deficit of nearly half a crore. Against a monthly revenue of Rs 83.30 lakh, the Board has a committed expenditure of nearly Rs 1.25 crore per month. The shortfall of Rs 45-50 lakh per month has been the pattern all these 50 years that Meghalaya has been. A thumb rule calculation shows that the SMB today has an outstanding liability of at least Rs 300 crore.
A closer look at the Board’s major head of committed expenditure is its salary bill. The current liability on staff salary is Rs 93 lakh. It has 481 regular staff and an undisclosed number of part-timers.
As against this, it has a monthly collection of Rs 83.30 lakh which is mainly derived from an array of civic taxes from every holding falling within the municipal areas. Property tax calculated at annual rental value, water tax, sanitation tax, street light tax etc form the core of the burden on rate-payers. Parking fees and sundry other fees add to the kitty. With a bloated staffing pattern and depleted revenue base, the story is a familiar one.
Over the decades, the character of SMB has changed beyond recognition. In the olden days, recall some senior citizens, the Board used to run ambulance, provide health service like vaccination etc., extend financial support to elementary schools and evacuate night soil by engaging an army of scavengers. With sanitary latrines replacing service latrines, today SMB’s major challenge is to clear solid waste from all localities. Everybody agrees that this task is being carried out by the Board in a fairly satisfactory manner. Thanks to the 255 sweepers, 33 mazdoors, 27 drivers and 67 lorry attendants who dispose of garbage from 27 wards covering over 10 km land area. The SMB has 13 area supervisors and 27 vehicles which fan out every morning to accomplish this critical task.
Water supply has always been a sore point with the citizens. With PHE partly stepping in and most people turning to drawing water from underground, the SMB’s burden has eased only that much. Yet, it encounters helplessness with dwindling water sources and added pressure of expanding population. Census figures of 2011 put population in municipal areas at 1.45 lakh. After a decade, the population should stand no less than 2 lakh, while the resources have remained static.
PROPERTY TAX
Although taxation reforms have been long overdue, informed citizens feel, the general reluctance among a big chunk of the urban residents of the state to pay civic taxes, may not help achieve the targeted amount. The Shillong Municipal Board has been tardy and selective in collecting civic taxes due to it from urban dwellings. At present, the Board collects taxes primarily from business houses and some residential localities. A big slice of tax payers have either chosen not to honour the tax notice or the Board has been unable to exercise its authority. Many therefore doubt whether or not SMB will be able to turn it around this time.
The amended bill will enable SMB to levy higher taxes in respect of water supply, solid waste management, sewerage and sanitation, street lighting, toll on vehicles and animals using municipal roads, parks, play fields and recreational centres, municipal crematoriums and burial grounds etc. If the SMB has its way, citizens may have to pay higher charges on registration of pets, trade and professional licences, birth and death certificates.
While all these may be routine, one controversial area may be fixation of “property tax”. The Bill defines Property Tax as “aggregate of house tax, drainage tax each of which shall be calculated as a percentage of annual ratable value of the covered space of a building.” In addition, the Board has been empowered levy tax on “vacant land tax”. The definition of such a tax is ” The amount of vacant land tax in respect of any holding which is lying exclusively vacant without any built up structure shall be equal to the normal rate of tax applicable to buildings multiplied by annual ratable value of the vacant land’.
To achieve this objective, the Bill authorises the Board to set up Municipal Valuation Committee which will fix the revised taxes based on the location, proximity to main road, type of building whether RCC or Assam-type, age of building, whether residential or commercial etc. Every holding will be served with a form to submit a self-assessed tax calculated on these parameters.
The critical question that knowledgeable circles are raising, does the government really mean business? Will it be able to enforce higher taxes across the board? Or is it a mere hogwash for becoming eligible for Finance Commission award?

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