By Dr Bhamy V Shenoy
Mysuru, November 30:- The city has the potential to raise at least Rs. 250 crore but the actual tax collection has been from Rs 60 crores in 2012-13 to only Rs 94 crores in 2016-17. It is time we put the property tax (PT) on the city’s agenda.
In the 2017-18 budget, the proposed target for PT was Rs. 175 crores and the actual amount collected was about Rs. 100 crores. For 2018-19 a more realistic target of Rs. 122 crores have been set. However, during the budget deliberation, no one questioned why such a low target has been set when the potential is Rs. 250 crores.
Property tax is a major revenue contributor for any city and it could be as high as 50% of total revenues. When the MCC budget revenue is Rs 712 crore for 2018-19, property tax target for MCC should have been Rs 356 crore. The current goal of Rs 122 crore are less than 18%. This clearly shows the serious problem MCC faces. But the tragedy is that it has attracted no attention over the years though much has been written on all aspects of the property tax system.
With less than five months left for the new budget year, it is high time we the citizens put pressure on MCC to take some corrective steps to streamline the property tax collection for 2019-2020.
Issues raised in the past by Mysore Grahakara Parishat (MGP) regarding property tax are: need for digitisation of tax records, online tax computation and payment, taxpayer-friendly and knowledgeable MCC staff, clarification of byzantine tax rules, irrational way of assessing tax, failure to identify defaulters, and lack of formal system to detect wrong computation of taxes. There has been little or no progress on any of these problems.
MGP has been promoting the application of computers for Mysuru’s property tax system since 1989 with no success. MGP used to urge every new commissioner to computerise the property tax system. With the exception of very few commissioners, everyone used to agree that it is a great idea and they would implement it. Still computerising the property tax has remained a dream for Mysuru despite having world-class software companies. If MCC approaches Infosys, they may offer to develop the system free of cost as part of their Corporate Social Responsibility (CSR).
Way back in 2008, when Manivannan was MCC Commissioner, there was an online calculator available to compute taxes. Later during the time of former MCC Commissioner Raiker (in 2010), we were promised that “with a click of the mouse we could pay taxes from any part of the world.” With the help of Geographical Information System, MCC identified 2.04 lakh properties and digitize them. Before that MCC had previous records on only 1.4 lakh and of that a significant number were not paying taxes. All these efforts did not result in any improvement.
The way current tax laws are drafted, land holdings in urban areas can get away with low or no taxes. A house owner on a small plot will pay the same tax as one on larger land for a house of the same size if vacant land does not exceed three times the plinth area. This is because vacant land around the house is not taxed.
Another irrationality is that the tax amount is revised every three years and that too no more than by 15% usually. As a result, a house which was recently built will end up paying far higher taxes than, say, a comparable house (having the same or higher market value) built 10 years ago.
Laws seem to be so complex that municipal tax authorities give different interpretations of them. Despite SAS being adopted back in 2003, tax authorities were not sure until this year what amount of penalty to collect from those who violate building bylaws. For example, in Mysuru, just till last year, penalty collected was just equal to the actual tax while, in fact, it should have been twice the actual tax. Apartment owners had another rude shock. Some were asked to pay for vacant land surrounding the building on a pro-rata basis. Some were asked to pay only for the covered land.
It is high time, Mysureans start a movement “Digitisation of Property Tax System” to put pressure on elected leaders and MCC bureaucrats to streamline the entire property tax system. When residents in Bengaluru can pay their taxes online, why can’t we? MCC should organise a high-level committee consisting of competent corporators, revenue officers with expertise and leading auditors of the city to look into the archaic tax system to computerise to collect tax online and also to have a world-class management system to identify defaulters to take timely action. If we want to have an online payment system starting from 2019, time to develop a digitised tax system is now. (The writer is from Mysuru Grahakara Parishat)