Raviprasad Kamila / The Hindu
Mangalore, Mar 28: There is an alarming decrease in the collection of property tax by the Mangalore City Corporation this year. It is attributed to the confusion created by various politicians among people over the self-assessment scheme (SAS).
It appears that the corporation officials did not give adequate publicity on the issue nor created an awareness among the people about shifting to the SAS for paying property tax from 2008-09.
Sources in the corporation told The Hindu that the corporation collected Rs. 3.53 crore as property tax till February-end against the expected Rs. 20 crore. The tax collection of Rs. 3.53 crore includes the tax arrears of 2007-08.
In 2007-08, the corporation had collected Rs. 9 crore as property tax against the targeted Rs. 14 crore.
Of Rs. 3.53 crore collected till February-end for the current fiscal, Rs. 88.37 lakh was under self-assessment scheme (SAS) implemented from this financial year. The balance of Rs. 2.64 crore was the arrears of last fiscal.
After the SAS for paying property tax came into force from April 1, 2008, the corporation could collect between Rs. 5 lakh and Rs. 6 lakh till mid-December, 2008. In February, 2009, however, the collection under SAS was Rs. 74.26 lakh.
“We are expecting Rs. 1 crore revenue under SAS in March,” an official said.
Even if the corporation were to collect Rs. 1 crore this month, its maximum revenue from the property tax in this year would be Rs. 4.53 crore, which was far below the expected Rs. 20 crore, sources said.
Impact
Poor tax collection might come in the way of maintaining civic facilities of the corporation. The corporation depends on the revenue earning through property tax for maintaining civic facilities and undertaking some development projects, sources said.
Sources said that politicians had created confusion among the people by stating that since tax rates under the new scheme were high, the corporation might reduce the same. Such statements prompted the people to wait for the revision in tax rates.
A ruling party leader in the council of the corporation had, even before the declaration of general elections, said that people could pay tax as per the old method, although the SAS was in force in the corporation.
Sources said that SAS would stay. The council of the corporation could reduce the tax rates. But the corporation could not implement the revised rates unless the State Government approved it.
Old method
Till the end of previous financial year, the corporation was collecting property tax under the annual rental value (ARV) method. Under this method, the property owners used to wait till the corporation sent notices to them for payment of tax. As the corporation implemented the self-assessment scheme for property tax from this financial year, the method of calculating tax was shifted to capital value system (CVS). According to corporation officials, it is the most scientific method of calculating property tax. Under this method, people should file tax returns and pay tax on their own as they do not receive any notice from the corporation. After the SAS was implemented, the civic body could collect only Rs. 88.37 lakh revenue till this February-end, sources said.