Civic body to collect compound interest on pending tax dues

“While issuing orders to revise property tax rates, the government has allowed us to impose a penalty of 2 per cent of the total pending property tax dues from the building owners if they fail to pay the tax in 15 days of the half-year. We have sent a proposal to the government requesting an order to implement this,” a Chennai Corporation official said.

The official added that apart from levying 2 per cent penalty, the civic body would also collect the dues on a compound interest basis. The officials are waiting for approval from the government, which is expected to be given before the end of the first half of the present financial year. Building owners who pay tax before the start of every half-year would receive incentives.

Even though the Chennai Corporation managed to collect more than Rs 1,000 crore as property tax in 2018-19 fiscal, total tax default stands at more than Rs 350 Crore. “While middle-class building owners are paying property tax properly, owners of big properties have huge defaults. Imposing the penalty is the only way to collect tax from them,” he added.

If the defaulters fail to pay the tax even after imposing compound interest, services such as water, sewage connections and power would be cut.

Meanwhile, the civic body collected more than Rs 371 Crore as property tax till July 30, which is around Rs 135 crore more when compared to tax collected till July 30 previous year.

In a move to coerce the property owners who have long-pending dues, the officials have been parking garbage trucks at the gates of such properties. On Thursday, revenue officials of Tiruvottiyur zone parked a garbage lorry in front of a movie theatre following which the owner agreed to pay tax and clear defaults.