Hyderabad, January 17: The state government has agreed to release 95 per cent of professional tax collected to the Greater Hyderabad Municipal Corporation (GHMC) from the coming financial year of 2011-12.
Minister for Finance Anam Ramnarayana Reddy has given an assurance to the mayor Banda Kartika Reddy and deputy mayor Jaffer Hussain on the issue. Both of them had previously given a representation to the finance minister and M Maheedhar Reddy, minister for, explaining how the the GHMC was deprived of its legitimate share in the revenue transfers from the government like property tax on government buildings, Motor Vehicles tax compensation and professional tax compensation.
Karthika Reddy and Jaffer Hussain said that only Rs 20.13 crore was released as property tax the previous year, as against the actual demand of Rs 183.21 crore.
Similarly, on Motor Vehicles tax compensation, the mayor informed that originally the local bodies were levying tax.
Subsequently, the government took over with a rider that compensation will be paid to municipalities. But it has been releasing only Rs 60 lakh per annum to the GHMC.
The mayor said the amount was not enough as the corporation was incurring huge expenditure for proper upkeep and maintenance of 7,000 km city roads.
The second State Finance Commission has also recommended that 10 percent of income towards MV tax be given as compensation to the urban body.
An amount of about Rs 500 crore is being collected towards MV tax by the Transport department. 10 per cent of this amount will come to Rs 50 crore.
The government has agreed to allocate the said amount to the GHMC in 2011-12.
On professional tax compensation, the government is releasing Rs 50 crore each year.
The amount is expected to swell up to Rs 150 crore, if the government decides to release a substantial portion of tax collected.
–Agencies