Cost for LG bodies doubles with increase in members
With the conclusion of local government elections yesterday at a cost of around Rs. 4 billion, the expenditure of maintaining 340 local authorities has been almost doubled as the number of elected members has gone up to 8,356 from 4,486, previously.
The Treasury will be facing an uphill task of allocating money for the recurrent expenditure of billions of rupees to maintain the poor revenue generating, Municipal Councils, Urban Councils and Pradeshiya Sabhas, official sources disclosed.
These local authorities are tainted with malpractices, corruption waste, and irregularities. The cost of running these authorities inclusive of wages to members and their state would go up to Rs. 34 billion compared to Rs. 21 billion earlier.
A sum of Rs. 31 billion has been allocated to Provincial Councils and Local Government Ministry to maintain local government bodies under the 2018 budget while the previous cost for 4, 486 members was around Rs.1. 5 billion and it has now almost doubled due the doubling of newly elected members.
The cost is said to be much more than the Rs. 31 billion but the Treasury has sought to trim the fat to stick to the budgeted figure.
The local revenue base particularly at municipal councils has been affected due to improper and, at times illegal tapping of local resources by outsiders and powerful politicians as the local authorities do not have powers and people to manage local resources, a study conducted by the Local Government Ministry pointed out.
Vast economic resources belonging to areas of jurisdiction of local authorities are being exploited by micro to macro investors from outside the area who make huge profits without paying anything substantial to the local body.
Collecting arrears of revenue and assessment of taxes has not been carried out in a sound manner and losing a considerable amount of assessment of tax revenue due to the improper activities of local authorities, the recent report of the Parliamentary Committee on Public Accounts (COPA) revealed.
The Colombo Municipal Council (CMC) administration and revenue collection has deteriorated in the past few years due to interference of powerful politicians, a senior CMC official who wished to remain anonymous, told the Business Times.
Pavement hawkers are not paying their rent amounting to millions of rupees monthly occupying CMC property illegally and forcibly with the support of politicians.
The CMC has to collect Rs. 39 billion in arrears in taxes and is compelled to write off a large sum of money owing to political pressure, he said adding that the new administration of the CMC will have to rectify this situation immediately.
It has also failed to collect millions of rupees in entertainment taxes from recent mega musical shows; he said pointing out evasion of such taxes on a large scale during the previous Rajapaksa regime.