The Calcutta Municipal Corporation (CMC) is likely to introduce next month a scheme to waive interest accrued on unpaid property tax if allowed by the state government, an official of the civic body said.
The authorities hope the waiver scheme would encourage property owners to clear their tax arrears, boosting the civic coffers that have been reeling under the Covid-19 pandemic.
An official said the CMC’s income from property tax — its biggest income source —from April to August was 29 per cent less than what was collected in the corresponding period last year. Civic officials are pinning their hopes on the scheme to waive interest to cover the deficit in property tax collection and also increase the collection compared with last year.
The CMC had last floated a waiver scheme in 2012 and the response was encouraging.
“We have sent a proposal of interest waiver on unpaid property tax to the municipal affairs department. We hope to receive an approval soon so that we can float the scheme by early October,” said a CMC official.
“We have proposed a complete waiver of the accrued interest so defaulters can come clean by paying only the principal.”
Property tax defaulters together owe Rs 2,300 crore to the CMC. The amount does not include the interest accrued on the unpaid principal over the years. Most of the large tax defaulters are commercial establishments.
“The waiver is a win-win situation for both sides. The defaulters look for a way to come clean by paying. If they do not need to pay interest, many of them will be keen to pay the tax arrears. For us, too, it is a good way to recover unpaid tax,” a CMC official said.
“In times like now, when revenue earning has taken a hit, this scheme could help us strengthen our coffers.”
The civic body’s main sources of income are property tax, trade licences and approval of building plans. The earnings from all three sources have dipped significantly since April, following the imposition of the lockdown to slow down the spread of Covid-19.
Property tax collections, however, are ahead of the other two by a significant margin, said an official.
Earlier, the civic body had decided to start visiting new housing complexes to help residents understand the nitty-gritty of property tax, in a bid to encourage them to pay their taxes on time. The visits were supposed to start in July but were postponed as Covid-19 cases saw a sharp spike that month.
The CMC has also planned to provide a rebate to those who make online payments of property tax but it needs an amendment to the CMC Act, for which the Assembly’s approval is necessary.
The civic body’s 2019-20 budget had set a target of Rs 1,021.50 crore as revenue from property tax. The target for collection from building plan approvals was Rs 131.77 crore and that from trade licences was Rs 73.54 crore.