New property tax system flops

New property tax system flops
02/12/2017 , by , in News/Views

Civic officials are caught in a dilemma over whether to persist with the new property tax system or revert to the old one following a slump in property tax collection coupled with an abysmal response to the unit area assessment (UAA) system.

Eight months since the introduction of UAA, only 5% of 7.5 lakh property owners in Kolkata have applied for re-assessment under the new system. Worse, average monthly tax collection has been steadily declining with October and November proving to be the worst months.

However, even those officials who want a switch to the old rent-based revaluation system know that doing so will be a huge challenge as well. The West Bengal assembly has already passed a bill implementing the UAA from April 1, 2017. To rev-erse it, an amendment has to be brought to revoke UAA and reintroduce the old system.

They are also aware of a condition laid down by Asian Development Bank that links loans to tax reforms like introduction of UAA. KMC is poised to get Rs 5,000 crore from the multilateral bank to finance water supply, sewage and solid waste management projects. The UAA system is already in place in Ahmedabad, Chandigarh, Patna, Bengaluru and Greater Mumbai. Thus, a section of officials at KMC want to give UAA a fresh thrust by expediting the enrolment process.

Till date, only one in 20 property owners have applied for UAA and just over 1% have been registered.

To drive this migration to UAA, some have suggested that it be made mandatory after January 15, 2018. That is the date till when tax payers have the option of choosing to either remain with the old system or move to UAA. But if applications for UAA remain as poor as it is at present, the KMC assessment department may unilaterally calculate the tax under UAA and send the bill to owners.

Between the two extreme measures is a softer one that many in government want KMC to pursue. That involves offering sops to woo property owners to UAA.

Also, it wants KMC to contract property tax consultants who will be stationed at borough offices and help property owners fill up of UAA forms against a nominal fee.

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