BMC banks on property tax and pending dues to boost revenue
Publish on : 2021-02-05 12:46:44
Since the BMC's revenue from the building proposal department was badly hit due to the lockdown, it is depending on property tax collection to increase its yearly earning.
MUMBAI: Since the BMC's revenue from the building proposal department was badly hit due to the lockdown, it is depending on property tax collection to increase its yearly earning. The municipal corporation aims to collect Rs 7,000 crore in 2021-22 through property tax, which will be its second highest revenue source after government grants in lieu of octroi.
The slowdown in real estate deprived the corporation of its biggest income sources-so far, property tax collected this fiscal is a mere 17% of the targeted Rs 6,768 crore and building development charges are 70% less than the estimated Rs 3,880 crore. The BMC, however, set an ambitious target of Rs 7,000 crore for property tax collection in its 2021-22 budget, Rs 500 crore more than the targeted revenue estimated this fiscal.
With the long-pending property dues amounting to over Rs 16,000 crore, the BMC plans to recover Rs 5,000 crore from various state government departments and Rs 1,600 crore from the Slum Rehabilitation Authority (SRA) to increase its revenue earning in 2021-22.
"Property tax collection is BMC's major revenue source. Whatever tax dues we are unable to recover this year, we will do it next year. It is deferred payment which one need to pay, so it is not loss of the BMC," additional municipal commissioner P Velrasu said.
The BMC admitted that it will not meet the targeted Rs 6,768 crore earnings from property tax this fiscal, hence there will be a reduction of around Rs 2,300 crore in the collection till March end. In 2021-22, Mumbaikars will be charged the same amount they are paying in the current financial year, officials said. They added that the exemption in the general tax component of property tax collected from houses whose carpet area is below 500 sq ft is not affecting the BMC, as such amounts are only a couple of hundred crores.
According to officials, earning from the building construction department has been affected as Maharashtra Housing and Area Development Authority (Mhada) has become an independent development authority for premises under its control and rakes in the construction premium which earlier came to the BMC.
Also due to relaxation of open space around buildings norm, the BMC is unable to earn deficiency premium.