BMC’s performance dismal in property tax collection: CAG audit

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MUMBAI: In a report presented to the state assembly of Maharashtra, the Comptroller and Auditor General (CAG) of India criticised the Greater Mumbai Municipal Corporation (BMC) for its appalling performance in collecting property tax. According to the CAG report, Mumbai’s effectiveness in collecting property taxes is only 28 percent, much below the average rate of 53 percent for other urban local bodies.

The report has claimed that, in the 44 urban local authorities throughout the course of five fiscal years, from 2015–16 to 2019–20, the average effectiveness of collecting property taxes was 53 percent. However, the Municipal Corporation of Greater Mumbai’s rate during that time was only 28 percent. According to the survey, even among municipal corporations, the average tax collection rate is 47 percent, which is significantly higher than that of Mumbai. The BMC has also failed to establish The Property Tax Board (PTB), which aids urban authorities in appropriate property tax management.

However, the BMC has lately started to recover unpaid property tax debts of Rs 300 crore for the fiscal year 2019–20. The government had previously said that residential properties up to 500 square feet were exempted from paying property taxes, but it was later made clear that just the general tax portion was exempt. The property tax bill for 2020–21, which accounts for 15 per cent of the overall cost, has been collected by BMC. Bills for 2019–20 are currently being sent, according to senior civic officials.

In its audit, the CAG also identified numerous instances of tax collection mismanagement by urban local authorities. It also mentioned the discrepancies between tax demand and collection. Between 2015–16 and 2019–20, the demand for property taxes rose by 153 percent, but the amount of tax actually collected had decreased to about 25 percent. The Geographic Information System (GIS) mapping of the properties was not finished in 34 out of a total of 44 urban bodies, according to the report.