Betterment levy on under construction commercial buildings redistributed

SBCA to receive 10%, rest to be divided among municipal, water authorities

HYDRABAD:

Following the order of Sindh High Court, based on the recommendations of the Hyderabad deputy commissioner, the Sindh government has slashed the share of the Sindh Building Control Authority (SBCA) in the betterment charges collected from under construction commercial buildings to 10 per cent. A notification in this regard for Karachi and Hyderabad was issued on Monday.

The SBCA used to collect the Levy Infrastructure Betterment Charges from developers of all commercial or apartment buildings in both the cities. The authority kept 60 per cent share from the levy and distributed the remaining 40 per cent among three departments in Karachi and two in Hyderabad.

Under the redistribution, the SBCA will keep 10 per cent of the tax in the two cities. In Karachi, 45 per cent of the amount will be handed over to the district municipal committees, 25 per cent to the Karachi Water and Sewerage Board and 20 per cent to the Karachi Metropolitan Corporation (KMC).

Read More: SBCA, KMC in hot water

During the hearing of an anti-encroachment case before the SHC Hyderabad circuit bench, Hyderabad Deputy Commissioner Fuad Ghaffar Soomro pleaded that the levy should be re-bifurcated with up to 60 per cent share to the Water and Sanitation Agency (WASA), 30 per cent to the municipal authorities and only 10 per cent to the SBCA. He contended that since the levy is charged for infrastructure projects like roads, water supply and drainage, the SBCA is not competent to keep the maximum share for which WASA and municipalities are the relevant agencies.

The SBCA should be given only service charges for the tax collection. His contention was also supported by the builders and developers.

As per the notification, now WASA will get 60 per cent and the Hyderabad Municipal Corporation 30 per cent from the betterment charges. An official of WASA said the redistribution will help the financially starved agency undertake the development works.

Published in The Express Tribune, July 21^st, 2021.