The Nagpur Municipal Corporation’s (NMC) rebate system has failed to encourage and convince citizens to pay property tax, with only 40% taxpayers making payments on or before December 31. The remaining 3.92 lakh taxpayers have lost the chance to avail rebate, and will be levied penalty of 2% per month.
The civic body’s data shows total demand of property tax increased to Rs950 crore in current financial year due to revaluation and reassessment drive carried out in last few years. NMC started to issue demand notes on time in April to all 6.5 lakh taxpayers, as against earlier system of issuing demand in October-November.
Of the total Rs950 crore, demand for current fiscal was Rs256 crore. As per norms, citizens have to pay tax on or before December 31 or will face penalty of 2% per month. Some 2.58 lakh (39.69%) taxpayers paid the tax on or before December 31. Total recovery was Rs145 crore, of which Rs90 crore was for current financial year and remaining Rs55 crore was arrears.
The target for current financial year is Rs289 crore, which seems a difficult task if one considers the recovery till December 31.
In last fiscal, 2.67 lakh (41.08%) citizens had paid tax on or before December 31, which is slightly higher than the figure of current financial year.
To encourage citizens to pay tax on time, municipal commissioner Radhakrishnan B had launched rebate system in last fiscal. Citizens get 10% rebate if they pay tax between April 1 and June 30. NMC gives 5% rebate if payment is received from July 1 to December 31. However, the rebate system made no difference to collections.
Some 82,332 citizens paid tax and availed rebate of 10% up to June 30 in current fiscal while 1,75,597 persons paid tax between July 1 and December 31 to avail 5% rebate.
Taxpayers had not paid arrears despite the civic body floating an amnesty scheme two years ago. NMC had offered 80% waiver of interest, however, only 11% of defaulters had responded positively.
NMC deputy commissioner Milind Meshram told , “Stringent action will be taken against defaulters. Citizens should take property tax seriously as it is now NMC’s main revenue source for providing various civic amenities to entire city. Taxpayers think they will not face any penalty as penalty will be waived, so they delay paying tax as much as possible. NMC’s tax is less than even gram panchayats and grade-C municipal corporations like Amravati.”
Another NMC official said most defaulters are big establishments and slum-dwellers. “Earlier, NMC staffers used to collect tax by going door-to-door. Majority of people used to wait for staffers to come and pay tax. We changed this system to distribute demand notes online, manually and allow payment of tax through non-cash systems including online payment. The number of taxpayers paying online is also on the rise.”
He added there is a rise in number of taxpayers paying tax of current fiscal. However, arrears remain a major worry. “We had brought around 1.7 lakh open plots under tax ambit. We levied tax going back six years. Owners of these open plots are not paying tax, fuelling arrears. Also, not many are obtaining sanction of layout, building plans and occupancy certificate (OC), so they are not coming under tax ambit. We are hoping to increase numbers of those paying tax once mutation and assessment go online,” he said.
