Starving for money: KMC plans to tax road users

If DHA and cantonment boards can do it, why can’t we, say city officials.

KARACHI:

The city administration wants a Karachi-specific tax on auto fuel consumption as a way to recover charges from the public for using roads, bridges and other infrastructure, a top official has told The Express Tribune.

Commissioner Roshan Ali Sheikh thought this approach will help the Karachi Metropolitan Corporation (KMC) overcome a jurisdictional conflict with Defence Housing Authority (DHA) and the cantonment boards. KMC actually controls a mere one-third of the city, with the rest of the power lying with other authorities, such as DHA and the Karachi Port Trust.

“We have proposed a special levy,” he said. “Let there be a tax, even five paisas, on a litre of petrol or a kilogramme of CNG (compressed natural gas) for Karachi only. It will surely address part of the concern.”

There is no toll tax on intra-city roads, which the KMC maintains with its budget. Attempts to get people to pay for other municipal services such as the cleaning of gutters, garbage collection and firefighting services have also largely failed. For KMC, though, the annual cost of building and maintaining the city’s roads, flyover bridges and underpasses runs into the billions of rupees.

The cash-strapped KMC remains bitter about the fact that other residential powers such as DHA and cantonment boards outclass it in terms of service. City officials argue that they resent the fact that these independent authorities are free to tax residents as they wish.

The new plan will hopefully override jurisdiction infighting and limitations. “When we tax everyone on fuel consumption, then it won’t matter if you live in DHA or somewhere else [you’ll pay irrespective],” Sheikh said, adding that the federal government is looking into the proposal.

It’s all free

KMC plans to start from January a fresh campaign to charge people for using infrastructure and taking advantage of other services such as garbage collection.

In some parts of the city, people who don’t receive piped water are willing to pay Rs2,000 for a private water tanker but they refuse to pay municipal charges, complained a KMC official.

“Some of their (citizens) concerns are genuine. They say, why should there be a tax when the roads are broken and the sewerage pipelines are choked,” he said. But then he goes on to argue: “Let us be financially self-sufficient and we will give you all the services.”

So far, attempts to tax residents have failed as collection fell short of the targets and people were not ready to pay for the services which fall short of their expectations.

In one and a half years, since the municipal service charges were imposed and letters were sent to people on a quarterly basis, KMC has collected only Rs380 million. “We should have raised at least Rs4.5 billion,” said the official.

Number problem

The municipal tax department has good reason to ask people to pay for the work it does. “You pay the sweeper Rs250 a month to remove the garbage from your flat or house,” said the official. “But then it is so hard to pay KMC, which uses a dumper truck to take that very garbage miles away, burning the fuel, and then disposing it of.”

Up till now, only 1.2 million consumers have been identified for the municipal charges. The good news is that in certain neighbourhoods the response has been good, such as Gulshan-e-Iqbal, where the official said 100% of people paid.

Still KMC will start more work to enlist more flats and houses in the city of 20 million people. It doesn’t want to leave any stone unturned, and not just for the road tax.

Published in The Express Tribune, January 9^th, 2012.