Shimla: The Municipal Corporation (MC) of Shimla has announced a 4% increase in property tax, stirring a wave of discussions and debates among residents and stakeholders. The decision, impacting around 30,000 building owners in the capital city. The MC attributes the tax hike to new guidelines set forth by the Central Government.

During a monthly meeting chaired by Mayor Surendra Chauhan, the proposal to raise property tax received approval despite facing opposition from some Bharatiya Janata Party (BJP) councillors. Municipal Commissioner Bhupendra Atri cited the guidelines issued by the Central Government, which require urban bodies to adjust taxes based on the state’s growth rate, as the rationale behind the increase.

The property tax increase will be implemented starting from the current financial year, with the revised rates reflected in the tax bills to be issued next year. The MC argues that complying with the 4% increase is vital to meet the Central Government’s guidelines and secure a significant grant of 40 crores for the city.

However, the decision has not been without its share of dissent. BJP councillors, including Saroj Thakur, Asha Sharma, Kamlesh Mehta, and Kalyan Dhiman, have expressed concerns regarding the additional burden this tax hike will place on the public. They have called on the MC to explore alternative avenues for revenue generation, rather than solely relying on increased taxes. While some councillors have proposed alternative methods of revenue generation, such as collecting pending bills. Consequently, the resolution to raise property tax was passed in the House.

The impact of the property tax hike will vary depending on the size and usage of properties, with additional tax amounts ranging from 2 rupees to 5,000 rupees. Commercial and larger properties are expected to bear a more significant proportion of the increased tax burden due to the nature of the tax calculation.

The announcement of the property tax increase has evoked mixed reactions from the public. Concerns have been raised regarding the escalating financial burden on property owners, particularly considering recent increases in drinking water and garbage charges. Many residents are urging the MC to explore alternative avenues for revenue generation that do not unduly burden taxpayers.

As the MC proceeds with the implementation of the property tax hike, the future implications and the efficacy of alternative revenue generation strategies remain uncertain. The annual increase in property tax, guided by the Central Government’s guidelines, is expected to remain a topic of debate. Property owners in Shimla will need to brace themselves for the possibility of future tax hikes as the MC endeavours to secure central grants by adhering to the prescribed tax increase rates.