Feeling the pinch after the division of Dhaka into two city corporations gave the lion’s share of revenue earning areas to the northern half, Dhaka South City Corporation (DSCC) is seeking fiscal powers to pay its bills.
In a letter to Finance Minister AMA Muhith, Dhaka South City Corporation Mayor Sayeed Khokon said he was seeking powers to impose city taxes, in addition to NBR taxes, on the consumption, export and import of commodities in his city corporation.
Citing provisions 4,5 and 17 under the fourth schedule of the City Corporation Act, 2009, the letter says city taxes can be levied by city corporations even though these clauses have never been used before.
Under the provisions, consumers and merchants would have to pay taxes to consume, import and export commodities over and above existing taxes levied by the National Board of Revenue, the letter reads.
The letter says the November 29, 2011 split of the erstwhile Dhaka City Corporation awarded 65% of revenue earning areas to Dhaka North City Corporation, leaving the south with older, revenue-poor portions of the city.
As result, the DSCC now carries a Tk300 crore deficit. DSCC employee salary bills would not be met if earnings did not increase, the letter said.
Although the DSCC’s current earnings and fixed expenditures are roughly equal at Tk300 crore, it is burdened by outstanding contractors’ bills of Tk200 crore, according to the letter.
With the city corporation’s finances in such straitened circumstances, quality municipal services cannot be sustained, the letter said, adding that it would not be possible to fund development projects with such limited resources.
Development projects include the construction and maintenance of roads, drains and footpaths.
The letter sought significant financial support from the budget “to rescue Dhaka South City Corporation.”
Khokon yesterday told the Dhaka Tribune that local government cannot run indefinitely on a deficit.
“We have to increase the scope of DSCC revenues,” he said, adding that imposing city taxes would help reduce the deficit.