KMC can collect Rs4.5b annually in taxes: mayor

Says implementation of digital system will help combat parking mafia

KARACHI:

City Mayor Murtaza Wahab has asserted that the Karachi Metropolitan Corporation (KMC) has the potential to collect Rs4.5billion annually in taxes.

Speaking informally outside the Sindh High Court (SHC) on Thursday, he underlined the significant responsibility placed on the KMC whenever issues arise within the metropolitan city, often likened to the “fatherly figure” role.

“The municipal tax collection agreement with K-Electric excludes the cantonment areas,” Wahab said and expressed optimism that the implementation of a digital system would help combat issues such as the parking mafia.

Highlighting systemic challenges, the mayor underscored the need for transparency and accountability in tax collection, noting that the current system, which relies heavily on cash receipts, lacks clarity regarding the total revenue collected. He stressed the importance of a transparent system to accurately track revenue and expenditures, ensuring efficient allocation of resources for the benefit of the city.

Addressing concerns raised during a court hearing regarding the collection of municipal tax in electricity bills, Mayor Wahab defended the agreement between KMC and K-Electric, citing the latter's effectiveness, particularly in areas without gas supply. He expressed willingness to address reservations and reduce the tax burden, mentioning that the minimum municipal tax had already been lowered from Rs500 to Rs200.

Earlier, a two-judge bench, headed by Justice Salahuddin Panhwar, heard a petition against the collection of municipal tax in electricity bills. Mayor Wahab appeared in the court. Judicial Assistant Munir A Malik Advocate stated: “I have submitted my written arguments.”

Counsel for the petitioner argued that there was a separate department of municipal taxes. Only they can receive taxes. K-Electric is a separate company. It works as a power supply company.

“You mean municipal tax cannot be collected through a third party,” one of the judges asked. “Only a government employee can collect this tax.”

The petitioner’s lawyer further argued that if consumers do not pay this tax, their electricity supply will be cut off. The collection of municipal tax by K-Electric is also in contravention of the Local Government Act.

“How the common man could be affected by this,” asked Justice Panhwar.

If the common man does not pay this tax, his power supply will be cut off, the petitioner’s lawyer stated. They are willing to pay municipal taxes but not through K-Electric. Not only K-Electric cannot collect municipal tax, but also cannot collect TV fees.

During the proceedings, questions were raised about the impact of tax collection on ordinary citizens. Mayor Wahab affirmed the necessity of taxes for societal functioning while expressing readiness to alleviate the burden on taxpayers.

The court adjourned the hearing until April 3, allowing the KMC to finalise the contract with K-Electric and ensure proper legal representation in ongoing matters.

Published in The Express Tribune, April 10^th, 2024.