The seven-storeyed Metro Tower in Bhubaneswar, which has allegedly been paying tax to the corporation for only one of its floors. Picture by Sanjib Mukherjee

Bhubaneswar, Sept. 26: The Bhubaneswar Municipal Corporation (BMC) has launched a drive against the evaders of holding tax.

Officials of the BMC have yesterday raided a multi-storeyed structure near Vani Vihar Square and suspended two of its tax collection officials for negligence in duty after it was discovered that the owners of the seven-storeyed building were actually paying holding tax for only one of the floors.

“We have inspected the Metro Tower, the IIPM building and the other establishments near Vani Vihar Square. We have found that though the entire seven-storeyed building of the Metro Tower was being used, the BMC was getting holding tax for only one floor,” said BMC commissioner Gadadhar Parida who was surprised that the corporation officials were unaware of this tax evasion for years.

The commissioner and the mayor jointly conducted the raid on the Metro Tower. The BMC officials informed that while the holding tax worth Rs 52,396 per year was being collected from the building, the civic authority was losing more than Rs 3 lakh annually as the money was coming from only one of the floors.

“We decided to act tough and put tax officer Bhagaban Sahu and collector Hari Nayak under suspension,” said Parida, adding that the BMC was also probing into complaints of holding tax violation against Kalinga Hospital, Hotel Suryansh and Pal Heights. The floor areas of these buildings during the planning stage and after expansion would be scrutinised. The BMC team came to know about the violations while assisting a team of the state vigilance department probing into such cases in connection with an RTI inquiry.

Parida said that BMC’s drive against holding tax violators would be intensified and an increasing number of commercial buildings, hotels, educational institutions, nursing homes and hospitals will be brought under the scanner.

“We may even constitute a special squad for this purpose. But, we also have a voluntary disclosure scheme through which the holding owners can suo motto declare the value of their properties. We hope people would take advantage of the scheme which would also benefit the BMC,” the commissioner said.

Sources in the corporation said that out of two lakh houses in the city, only 75,000 are included in the holding tax net.

“Earlier, we used to think only 30 to 60 per cent were evading holding tax but now it seems the number would be much higher,” said an official who admitted that the tax collectors could also be making mistakes during assessment.

The 15 tax wards of the BMC are managed by 75 collectors. Last year the team had collected tax of Rs 12.88 crore, against a target of Rs 21.73 crore, the achievement was 59 per cent. During 2008-09, the amount of collected tax was Rs 11.85 crore against a target of Rs.20.37 crore.

The corporation is planning to make the tax collection process more transparent using double entry computerised accounting system in collaboration with an IT firm.

Mayor Ananta Narayan Jena said the BMC could not afford to lose revenue, which was crucial to the development plans of the corporation. “We are neither going to spare the tax violators nor the corrupt officials of the corporation,” said Jena.

On the other hand, vigilance officers who were probing into holding tax violation cases in connection with an RTI application, said they would also look into the role of the officials responsible for collecting tax and making assessments.