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MCD panel to review property tax collection system

Thursday, 29 July 2010 10:47 administrator
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Indian Express     29.07.2010

MCD panel to review property tax collection system

Express News Service Tags : MCD property tax collection system, delhi Posted: Thu Jul 29 2010, 02:03 hrs

New Delhi: The issue of the Municipal Corporation of Delhi’s low property tax collections dominated its Standing Committee meeting on Wednesday. Members of the deliberative wing from both the ruling Bharatiya Janata Party (BJP) and the opposition Congress stressed on the imminent need to “restructure MCD’s system of property tax collection”, considering property tax is a prime source of revenue for the cash-strapped civic body.

The members also offered other suggestions to improve the tax collection and increase the agency’s tax net, emphasising on the need to get “stricter while enforcing penalty for tax defaulters”. The MCD has now decided to constitute a ‘sub-committee’ to look into the recommendations of the third municipal valuation committee (MVC).

While the agency is yet to decide on its members, once constituted, it will look into the suggestions of the MVC report to review the property tax system, including suggestions to upgrade 168 city colonies to augment collections.

BJP councillors accepted that the civic body needs a more streamlined procedure for launching prosecution proceedings against tax defaulters. They said the agency does not have a system in place to track defaulters and to take action against them at present.

According to its own admission, the assessment and collection department of the MCD is plagued by a number of problems in collecting tax, like general laxity on part of tax-payers, limited manpower for conducting a door-to-door survey to identify eligible tax payers and for realisation of tax, poor enforcement, lack of a database of all properties, etc.  Both Congress and BJP councillors suggested the MCD Commissioner must immediately ensure the department is provided adequate workforce.

The MCD must also serve notices to all tax defaulters, including public bodies like the NDPL, the DDA, DJB and the DMRC and ensure suitable penal action is then taken if these bodies do not pay heed to the notices, they added. The agency is also considering simplifying its property tax returns form to encourage more tax-payers to file returns.

Nine lakh properties owners in the city pay tax to the agency at present, officials, however, estimate atleast 22 lakh more properties in the city are eligible to be brought under the tax net.

Last Updated on Thursday, 29 July 2010 10:50
 

Report on property tax tabled

Thursday, 29 July 2010 06:04 administrator
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The Hindu      29.07.2010

Report on property tax tabled

Staff Reporter

A sub-committee to be set up to study it before approving its provisions

NEW DELHI: The much-awaited report of the Municipal Valuation Committee focusing on enhancing property tax revenue through efficiency improvements was finally tabled at the Municipal Corporation of Delhi's Standing Committee meeting on Wednesday.

The Standing Committee chairman Yoginder Chandolia, however, ordered the setting up a sub-committee to study it further before approving its provisions. The meeting also featured discussion on ways to increase property tax collection and concluded with the Municipal Commissioner being asked to submit an action plan in this regard next week.

Aiming at “more than doubling” the property tax revenue of the civic body, the independent committee has recommended upward revision in several factors for designating tax rates including upgrading the category of 168 colonies in the city due to their proximity to Delhi Metro lines. The upgrading of colonies to higher tax slot and revision of other factors coupled with new tax rates announced by the MCD in 2010-11 are estimated to more than double the revenue of Rs.696.49 crore per year to Rs.1,660 crore per year, according to the report of the Municipal Valuation Committee.

The committee “has decided to upgrade 168 colonies on account of metro lines and many more DDA developed colonies and special commercial properties”, the report stated. Other than the factor of location of colony within one km of metro line, it also took into consideration other parameters like capital value of land, rental value, infrastructure and proximity to commercial centres for recommending re-categorisation of colonies. Areas under the jurisdiction of the MCD are at present divided into categories A to H depending on infrastructural facilities there. Among the 168 colonies, 12 are proposed to be upgraded from B to A, 20 from C to B and 42 from D to C.

While the meeting highlighted the financial problems being faced by the civic body owing to shortfall in property tax collections, the councillors of both the ruling BJP and opposition Congress unitedly offered suggestions to increase the same.

Last Updated on Thursday, 29 July 2010 06:09
 

GHMC seeks 3-yr advance property tax

Wednesday, 28 July 2010 09:10 administrator
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Deccan Chronicle      28.07.2010

GHMC seeks 3-yr advance property tax

July 28th, 2010
DC Correspondent
Tags: advance property tax, GHMC

July 27: The cash-starved Greater Hyderabad Municipal Corporation (GHMC) has proposed to levy and collect three years worth property tax in advance from citizens constructing new houses or buildings in the city. The property tax for three years will be calculated based on the status of the land. If the construction is being taken up on a vacant or open land, the officials will calculate the vacant land tax, that is 0.5 per cent of the latest land registration cost and levy the same for three years.

Likewise, if an old bungalow, house or building is being demolished and a new one is being constructed in its place, officials will calculate the property tax that was being collected on the old building and collect the same for three years in advance.

The property tax will be collected in advance when builders come to the municipal office for building sanction plans.

Unless the tax is paid, the plan will not be sanctioned. The GHMC officials defended their advance tax proposal by stating that the validity of building permissions given by the civic body was for three years.

During these three years, the builder neither pays the vacant land tax nor property tax on old buildings being replaced by new structures, thus resulting in huge losses to the civic body.

“In fact, this advance tax system should have been adopted and implemented long back. The GHMC has incurred losses of crores of rupees. Every year nearly 50,000 permissions for construction of buildings including individual houses and flats are sanctioned and as a result the corporation has been losing crores in the form of taxes,” GHMC additional commissioner (finance/revenue), Mr Hari Krishna said.

If a builder completes the construction of a building in less than three years, then the property tax paid by him in advance will be adjusted with payments to be made after the three-year period.

 
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