Local body institutions denied higher OZT taxes

For a city direly in need of local representation for addressing the myriads of everyday issues disrupting the quality of life of citizens, the government’s inability to ensure an increased allocation of funds for the local body institutions through the Octroi Zilla Tax (OZT) will only perpetuate the cycle of underdevelopment and public mismanagement plaguing the port city.

Despite the Sindh government announcing an increased share of funds for the local government, the Sindh Finance Department’s decision to withhold the increasing of the Octroi Zilla Tax (OZT) allocated to municipal corporations, municipal committees, and town committees across the province, including the Karachi Metropolitan Corporation (KMC), has landed local body institutions in a financial quandary as they struggle to maintain operations whilst allocating a larger share of their treasury for salaries and pensions as stipulated in the guidelines of the recent budget.

“The treasury of the local body institutions mostly depends on the amount received in the form of the OZT. However, the OZT funds are very limited and are expended on the salaries and pensions of the employees. Therefore, it is imperative to increase the funds given to the local government institutions so that some money can also be spent on the development needs of the area,” urged Muhammad Amin Khaskheli, the elected member of Maripur Town Karachi.

Similarly, Abdul Rahman Motiwala, Vice-Chairman of Saddar Town, told The Express Tribune that the expenses of Saddar Town had increased drastically due to the increase in the salaries of government employees announced by the Sindh government.

“Since we are paying salaries to our employees as per the increase in the recent budget, our jurisdiction is now facing financial problems since the funds have not been increased through a larger share of the OZT,” lamented Motiwala.

According to sources, the Sindh government had planned to increase the OZT allocation for local bodies in the recent budget starting from the new financial year, with municipal corporations, including the KMC, set to receive a 30 per cent larger share of the OZT and district councils, municipal committees, and town committees to receive a 20 per cent increase in their funds.

It should be noted that the total number of local body institutions in Sindh is 1,870, including 1,618 Union Councils and Union Committees, 143 Town Committees, 36 Municipal Committees, 22 District Councils, 45 Town Municipal Corporations, 5 Divisional Municipal Corporations and one Metropolitan Corporation.

Apart from the employees serving in the Union Councils and Union Committees, more than 88,000 employees and 45,845 retired employees are also serving across other local body institutions, which have only received Rs2.25 billion for the month of August, as per the older budget.

Speaking to The Express Tribune on the matter, the Sindh Government's Spokesperson and Mayor of the Municipal Corporation Sukkur Arsalan Islam Sheikh said, “After the objection of the Finance Department, CM Sindh has formed a committee consisting of officers from the finance and the local government department for reviewing the matter. The Sindh government increased the budget of the local government department from Rs120 billion to Rs160 billion this year. The budget includes an increase in funds for Union Councils and Union Committees, a 30 per cent increase in the salaries of all local government employees and a 10 per cent increase in the pensions of retired employees.”