Date:28/04/2006 URL: http://www.thehindu.com/2006/04/28/stories/2006042824980300.htm

New Delhi

MCD plan to revise property tax rates

Staff Reporter

Alarm over dipping collections in last fiscal

NEW DELHI: Alarmed over the decline in property tax collection in the Capital in the last financial year, Municipal Commissioner A.K. Nigam on Thursday indicated an upward revision in commercial and industrial property tax rates to jack up the civic body's dwindling collections. The Municipal Corporation of Delhi it seems is headed for a financial crisis as against a property tax collection of Rs.817.93 crores in 2004-05, the MCD in 2005-06 managed to collect just Rs.787 crores against the target of Rs.1576.16 crores.

Taking part in a discussion on the issue in the MCD House, Mr. Nigam said the need of the hour was to increase tax rates for commercial and industrial properties besides increasing the tax base that now stands at 9.5-lakh properties. "Despite an increase in 2.5-lakh properties in the last fiscal, the tax collection declined. As per a survey conducted by the Department of Posts, there are around 22-lakh properties in the Capital. We need to increase our tax net to boost collection," he said.

Stating that under the Unit Area Method regime, tax rates of commercial and industrial rates had been steeply reduced, affecting their collection, Mr. Nigam said upward revision of tax for these two categories would help the civic body financially. In 2005-06, the Tax Assessment and Collection Department managed to collect Rs.479.01 crores from property tax and Rs.307.99 crores as transfer duty.

"It was due to non-payment of tax by several government organisations that we failed to improve our tax collection," said the Municipal Commissioner. Major government departments have to pay Rs.703 crores (ex parte figure) as taxes and arrears to the MCD. These include Delhi Metro Rail Corporation (Rs.252 crores), Delhi Development Authority (Rs.203 crores), Delhi Jal Board (Rs.140 crores) and Public Works Department (Rs.15.44 crores). Similarly, collection from power companies has also been dismal.

Announcing that the MCD would soon organise "lok adalats" to settle property tax disputes that were pending in courts and invite people to settle their dues, Mr. Nigam said interestingly, around 15,000 properties owners failed to deposit their taxes due to ongoing demolitions and sealing drives as they adopted wait-and-watch policy thinking that there was no point in depositing taxes as their properties might also be targeted during the drives.

Stating that he would also set targets for each official of the department and would make them accountable in case of any lapses, Mr. Nigam said: "We will also introduce new simplified property tax form that will be come in Hindi also." He also stressed the need to change the provision of providing rebates as people tend to take undue advantage from it by deliberately delaying their payments, posing cash flow crunch in the civic body. The Municipal Commissioner also warned officials indulging in corrupt activities with stern action.