Almost three quarters down the financial year, property tax collection shows a 34% deficit compared to last year as the BMC has issued no residential bills amid confusion over a waiver policy for homes under 500 sq ft.
Property tax collection was Rs 1,637 crore till Friday, December 13, while last year the assessment and collection department had pulled in Rs 2,495 crore till the same date.
Property tax is the biggest revenue source for the BMC. This year, all collection so far has been only from commercial establishments.
The municipal body issued no residential property tax bills at all this year as it has not calibrated its software and other systems to exclude living units under 500 sq ft while generating bills.
The software update has been kept waiting as there is lack of clarity on whether residential units under 500 sq ft are to be charged nothing at all or given only a base amount waiver while being asked to pay the other, smaller components of the bill like the various cess on it.
At a recent meeting with the CM, the civic administration flagged the issue of fund crunch at a time when the BMC plans to take up many big-ticket projects such as the coastal road and the Goregaon-Mulund Link Road.
BMC may not touch even half of property tax target, say critics
The Shiv Sena, the party which rules the BMC deliberative wing and is headed by CM Uddhav Thackeray, had in its 2017 civic poll manifesto promised property tax waiver for residential units under 500 sq ft in area.
The BMC also drastically increased its collection target to Rs 8,300 crore this year from the Rs 5,000-odd crore it used to set itself before now. Critics are sceptical about the municipal administration reaching even half its target.
“Property tax bills of Rs 2,000 crore have not yet been sent out to residential properties as the process of excluding those with flats under 500 sq ft is on,” an official said.
BMC officials said that the corporation assesses around four lakh properties every year. They said that though the BMC would issue property tax bills amounting to over Rs 5,500 crore ever year, the collection target used to be set at only about Rs 5,400 crore.
As outstanding property tax before the start of the financial year was over Rs 10,000 crore, the collection target was enhanced this time.
“This time our target for collection is set at Rs 8,300 crore keeping in mind the fact that Rs 10,000-crore-plus is the outstanding property tax demand of every year that is carried forward on average and we should begin recovering it,” a BMC official said.
Bandra corporator Asif Zakeria said the pending software upgrade and delay in sending out bills was blocking a crucial revenue source.
BMC officials said collection is expected to rise after clarity on the waiver is achieved and bills are issued. They also said many establishments pay property tax in the last month. “Therefore, our collections in the month of March are always the highest,” an official said.
Samajwadi Party leader in the BMC Rais Shaikh said the poor collection was a cause of concern at a time when the BMC was offering rebates for garbage segregation, doling out large sums to the cash-strapped BEST Undertaking and taking up infrastructure projects. “I am going to demand a financial white paper,” he said.