The Fifth State Finance Commission (SFC), headed by S. Krishnan, IAS, has some telling points about property tax collection in urban local bodies (ULB), including Chennai.
In its report, which has been submitted to the government, the commission noted that the last revision of property tax in Chennai Corporation took effect on April 1, 1998. In fact, the fourth SFC had observed: “The Chennai Corporation, which has to meet a huge gap in infrastructure provision, should feel financially bold to plan for future demand and improve its maintenance functions. Non-revision will seriously affect revenue mobilisation and will become a contributing factor for infrastructure gaps and deficiency in maintenance. A situation of no revision in the Corporation, while the surrounding municipalities, town panchayats and village panchayats keep revising property tax and user charge is also inexplicable.”
Still, there was no revision. So the Fifth SFC report said, “This observation is even more valid today. The stalling of the general revision is a serious setback to ULBs seeking to augment internal resources.”
In Chennai, the SFC said, where the powers to permit different types of buildings are with different authorities, ranging from the Corporation and the CMDA to the government, an online link between the databases of the CMDA and the Corporation would ensure a fool-proof system of updation of property tax registers.
Flaw in assessment
The commission also found a flaw in the system of assessment. The ULB authorities have to conduct the revision with the assistance of Special Revision Officers who inspect each and every house/building/vacant land, thereby preventing assessments being missed and under-assessments.
In the general revisions conducted in 1998 and 2008 (in ULBs), no Special Revision Officers were appointed and the revised assessment registers were prepared by ULB authorities with the help of available revenue employees. The government must ensure that adequate support staff are made available for the next general revision and a scientific basis of assessment with the application of GIS technology is adopted, it recommended.