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After impoverishing KMC, Sindh govt starts returning revenue streams

SBCA to hand over mobile phone tower taxes

SAMAA | - Posted: Jan 21, 2021 | Last Updated: 8 months ago
Posted: Jan 21, 2021 | Last Updated: 8 months ago

It always makes for good PR when the Sindh government announces that it is giving KMC money—except for the fact that it is one major reason why KMC is poor in the first place.

On Thursday, the chief minister said the Sindh government was giving KMC a Rs170 million grant so it could play its senior employees who have been waiting for their salaries since November. KMC cannot afford to pay its salaries because it doesn’t make enough money. That is because the Sindh government has changed the laws 20 times at least, since 2010, to strip KMC of its ability to earn, charge fees and taxes.

On the other hand, the PPP had been giving more powers to the district municipal corporations (West, East, Central, South, Korangi, Malir). They can collect property tax, tolls, taxes on professions, markets, fees on births, marriages, adoptions and feasts, billboards, cinemas and motor vehicles.

The KMC cannot collect a conservancy tax, for example, because this is now managed by the new waste management board. The fee it could make on plot conversions is collected by the Sindh Building Control Authority. (SAMAA Digital has reported extensively on this in a long investigation: Crazy Rich Karachi.)

And so it was interesting to hear Chief Minister Murad Ali Shah say on Thursday that he vowed to make KMC a financially stable organization by giving it a workable financial model and reorganizing its wings responsible for revenue collection.

He has formed a committee headed by Local Government Minister Nasir Shah with Law Advisor Murtaza Wahab, Local Government Secretary Najam Shah and KMC Administrator Laiq Ahmed to submit recommendations.

The chief minister said that it was quite disturbing to know that Karachi, being the industrial hub of the country, was financially running the entire country but its metropolitan corporation was bogged down in a financial crisis and was unable to pay its senior officers salaries. “We have to overhaul various wings of the KMC, particularly those which are responsible for revenue collection,” he said.

For whatever it is worth, the handout from CM House said that Nasir Shah gave details in the meeting of how the DMCs have cut back their non-development spending but have increased revenue. He gave the example of DMC South, which used to collect Rs9 million in charged parking that has gone up to Rs750 million.

DMC Korangi used to spend Rs20 million on garbage but has brought this down to Rs9 million only.  DMC Central has improved its revenue collection from shops.

KMC Administrator Laiq Ahmed also pitched in. He is the unelected bureaucrat running the show because no local government elections have been held for Karachi to choose a mayor. He said that there were around 1.4 million establishments or properties from where KMC collected a Municipal Utility & Conservancy Tax (MUCT). This time it could only manage Rs280 million from 35,000 units as the contractor had not printed the receipts to collect the tax.

The chief minister said that KMC has the potential to collect Rs1.5 billion in MUCT alone and it could auction the services of its petrol pumps, wedding halls and grounds to the highest bidders. “I want you to prepare a financial model and present it within the next 15 days and then I’ll add necessary input to make the KMC a rich organization,” he said.

The chief minister directed the Local Government department to issue a notification to take back Mobile Phone Tower tax collection from the SBCA and hand it over to KMC. “The collection, whatever the SBCA has made so far, should be paid back to KMC,” he directed.   

The chief minister said that KMC has valuable assets such as beautiful parks and huts along the beach. Why was it not operating them on a public-private partnership mode so that they not only became a reasonable source of revenue but could be maintained properly?

He said that he would be reviewing KMC’s financial position fortnightly. 

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