Civic bodies, which are reeling under acute funds crunch, have ignored a key proposal mooted for constituting a Geographic Information System-based database to strengthen property tax collection and improve their fiscal health. A recent scrutiny by the Comptroller and Auditor General has revealed that no civic body has come forward to constitute the system proposed for augmenting their resource mobilisation efforts by 100 to 250 per cent. Under-assessment and non-assessment of tax for residential and commercial buildings were incurring heavy loss too.
The fourth State Finance Commission headed by economist M.A. Oommen had recommended the creation of the GIS-based database for property tax assessment, which is already in vogue in different parts of the country. The commission had recommended the inception of the system considering the fact that property tax was the prime revenue source of local self-government institutions and construction the major economic activity which makes significant contribution to the State Domestic Product (SDP). A notable increase in profession tax and fall in property tax were also factors that prompted the commission to explore this option. This was deemed an unhealthy trend.
Streamlining of the tax administration to end corruption and nepotism was also suggested to complement the inception of the new system. This system was expected to give a clear idea about all structures within the purview of a civic body. The tax managers will not find it difficult to assess how old a structure is, its location, area, materials used for construction and all other vital details for tax assessment. Periodical review also will be very easy.
As per official estimates, civic bodies were collecting only 40 per cent of their tax potential. After 1993, no serious bid has been made so far to optimise tax collection.
Scientific system A scientific and transparent system will undoubtedly increase the revenue at least by 100 per cent or even more. Going by the estimates that only 40 per cent is being collected, it may even increase by 250 per cent, sources said.
But civic bodies seem to be sceptical of taking the plunge for which no valid reason has been attributed so far, sources said.
