Kolkata Municipal Corporation (KMC) is considering discontinuing the practice of granting property tax defaulters appealing to the mayor for a relief a blanket waiver on interest and penalty.
Instead, the civic body is planning to create slabs — those who have not paid the tax for many years will receive lesser monetary relief compared to those who are recent defaulters.
Mayor Firhad Hakim said on Wednesday that the existing system — granting 50 per cent waiver on interest and 99 per cent waiver on penalty — will continue till September.
Hakim did not say it in as many words that the facility would be discontinued after September, but KMC officials said there had been internal discussions on discontinuing the blanket waiver after a few months.
The KMC Act 1980 has a section that empowers the mayoral council to use its power to grant relief on the accumulated interest and penalty of property tax defaulters.
The act says that the maximum relief that can be offered is 50 per cent waiver on the accumulated interest and 99 per cent waiver on the penalty. The power was later delegated to the mayor by the mayoral council.
This is not a time-bound waiver scheme but a provision in the KMC Act that was included through an amendment about five or six years ago, said officials. It is up to the mayor to decide whether a defaulter would be granted the relief or not, officials said.
In reality, whenever someone wrote to the mayor seeking relief, they never got anything less than the maximum relief, said a KMC official.
“Whenever someone wrote to the mayor seeking a waiver, the mayor always extended the maximum benefit, which is 50 per cent waiver on the interest and 99 per cent waiver on the penalty. But there are now plans to change it,” said a senior official of the KMC.
“There will be slabs, like 10 per cent or 20 per cent going up to the maximum benefit allowed by the KMC Act. How much waiver a tax defaulter receives will depend on how many years the tax has not been paid,” said the official.
“Recent defaulters will get more monetary benefit, while those who have been defaulting for years will be entitled to lesser relief,” said Hakim.
The estimate for revenue collection from property tax in the KMC’s budget for 2023-24 is Rs 1,400 crore. The original estimate for collection from property tax in 2022-23 was Rs 1,280.50 crore, while the revised estimate for 2022-23 is Rs 1,158.06 crore.
The KMC has tens of crores of rupees in property tax dues. A handful of defaulters together account for a huge chunk of the dues.