The laxity in furnishing precise tax collection data has proved dearly for the local self-government institutions (LSGIs) in the State. Since the urban and rural local bodies were unable to provide accurate details of the revenue collected from various sources, the State government has decided not to release a 10 per cent incentive announced for enhancing their own funds by optimising tax collection in the previous years.
The proposal for incentivising tax collection was made by the Fourth State Finance Commission headed by M.A. Oommen. Complying with the recommendations, the Finance Department had secured the tax collection details of local bodies directly from the Panchayat Directorate in 2009-10 and 2010-11. On detecting grievous errors in the statements, the government has decided against releasing the incentive along with the development fund in instalments for 2012-13.
The Finance Department is understood to have informed the Rural and Urban Affairs Departments that the local bodies will have to furnish the details yet again and the incentive will be released only after analysing and confirming the veracity of the details.
All grama panchayats, municipalities, and corporations have also been directed to draw up an action plan for improving revenue collection and present it at the governing committees, councils, and grama sabhas. A consistent follow-up has also been suggested for implementing the action plan in a time-bound manner.
Official sources told The Hindu here that there was a culpable laxity on the part of the local bodies in maintaining the accounts and collecting the taxes due from various sources in time.
The Finance Commission recommendation for reviewing the fees levied for various services, raising the professional tax limit and rationalising the taxes and revenues being collected by the local bodies have not yet been implemented in its true spirit.