After revising the property tax, the Greater Chennai Corporation turned to business tax collection to improve its own revenue streams.
With its precarious financial situation, the Society began to explore various options to increase its own source of income, following the guidelines of the World Bank.
The civic body’s overdraft exceeded ₹500 crore and only seven lakh property tax taxpayers were filed with zero balance in property tax payment by the end of the semester (April-September 2022), have officials said.
Shortage of staff
Paralyzed by the lack of personnel at the tax office, the civic organization has been unable to take any initiative to increase its own revenue.
Property tax collection was assessed at ₹697 crore in the first half of the 2022-23 financial year.
At the last council meeting, the civic body passed a resolution to bring in private teams to reassess the 2.7 lakh buildings to raise property tax revenue.
“After taking steps to improve property tax revenue, the civic body plans to increase business tax revenue. But business tax rates will not be increased,” a senior official said.
“We will take it back. We will match the business tax database with the company registration database, GST records and see where the gap is to bring more assesses into the tax net,” the official said.
Officials said business tax revenue could match property tax revenue.
According to them, the business database needs to be updated after the COVID-19 pandemic, as many old business establishments have closed and new entities have started operations over the past few months.
According to deputy tax directors in some of the most urbanized areas, the collection of business tax could be equal to that of property tax once all city employees are covered by the business tax net.
At present, 1.51 lakh Professional Assessed have been identified across the 15 areas of the Company.
Income stream
The two other items for improving the Company’s own sources of revenue are parking and advertising. Average daily parking collection dropped from ₹80,000 to ₹1.2 lakh.
“By going further, we want to improve the system. New rules are being developed. Once the rules are notified for billboard and advertisement licensing, we can get more revenue,” a senior revenue department official said.
Additionally, the Company is expected to focus on integrating various property and real estate related services.
“When you buy land, you go to the Land Registry for property registration, then you go to the CMDA for a building plan or development approval, then to the Corporation for a building permit. building, then again for the property tax. There is already an interface with the citizens,” an official said.
Property ID
“One thing we are exploring is whether it is possible to do the property tax assessment at the point of one of these interfaces itself. One proposal is to introduce a provisional property tax assessment when granting a building permit by creating a property identifier,” the official said.
“However, the property tax will only be levied after the building has been completed or occupied. Property identification will help people connect to water and electricity,” he added.
