Hit by revocation of property tax hike, Corpn slashes target by half

The Tamil Nadu government’s decision to withhold property tax hike has hit the Greater Chennai Corporation’s coffer, forcing the civic body to reduce the property tax collection target for the year 2020-2021 by almost 50 per cent.
Hit by revocation of property tax hike, Corpn slashes target by half
Chennai Corporation

Chennai

According to the Chennai Corporation budget documents, it had fixed the target at Rs 700 crore for the collection of property tax during the 2020-2021 financial year. In the previous fiscal, the civic body had fixed a target of Rs 1,350 crore after the State government increased the property tax by 50 per cent for residential buildings and 100 per cent for commercial buildings.

“However, the government withheld the property tax revision hike. Due to this, the collection target for the current financial year (2019-2020) has been revised to Rs. 1,000 crore,” the Chennai Corporation said.

The civic body is expecting to earn Rs 1,051.20 crore through trade licence charges, building plan approval, parking and other charges.

During the 2018-2019 financial year, officials had collected Rs 1,002 crore, which is the highest collection by the Chennai Corporation till date. After several building owners raised anomalies in assessing the property tax rates, the State government withheld the revision order and appointed a committee to resolve the issues.

The reduction of the property tax target has also reflected in the Chennai Corporation’s budget estimates, as the civic body has been forced to pass an annual budget with a deficit of Rs 538.16 crore. In 2019-2020 budget and the revised budget, the civic body estimated a deficit of Rs 46.32 crore and a surplus of Rs 15.84 crore respectively.

The Chennai Corporation is estimating Rs 50 crore more in professional tax collection during 2020-2021 than what was estimated in 2019-2020. As per the budget documents, the civic body has fixed a target of Rs 550 crore as professional tax during next fiscal.

Worsening the civic body’s monetary situation, the salary and pension expense during 2020-2021 would increase by Rs 232.99 crore. As per the 2019-2020 budget estimates and revised estimate, the salary and pension expenditure were fixed at Rs 1,739.03 crore and Rs. 1,639.22 crore.

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