The Hindu   11.08.2012

Corporation to pull up tax-evading companies

The civic body has instructed revenue department officials in all zones to find out if these companies still exist. If so, they will be made to pay company tax. The Corporation will also identify employees in these companies who do not currently pay professional tax and instruct them to do so.

Company tax rates in the city are likely to be increased as the existing rate with a ceiling of Rs. 1,000 for half-year, is found to be low. A chunk of companies identified are in the newly-merged zones of Ambattur, Tiruvottiyur, Manali, Madhavaram, Valasaravakkam, Perungudi and Sholinganallur.

Under Section 110 of the Chennai City Municipal Corporation Act, all private limited companies and limited companies which transact business within the city, in any half year for not less than 60 days in aggregate, should pay company tax. This tax is based on the paid-up capital of the company.

Even though the civic body has planned steps to widen its tax base, attempts to increase the number of employees in the revenue department have failed. According to employees of the revenue department of the civic body, there needs to be one licence inspector for every ward.

At present, there are around 40 licence inspectors for 200 wards. Field-level officials of the revenue department pointed to the fact that work such as census was emerging as stumbling blocks for collection of revenue to a certain extent.

The civic body council, a few months ago, approved rates for company tax and professional tax in the newly-merged areas under its limits. The same rates that are in force in the old limits of the civic body were to be implemented in the new zones, according to the resolution.

The civic body is also planning to address the challenge of inadequate enforcement mechanism in order to ensure better compliance.

Majority of companies not paying taxes are in the newly-merged zones

Employees in these companies, not paying professional tax, will be asked to pay up