KMC i.e. the Kolkata Municipal Corporation took the decision to follow the tax model of New Delhi Municipal Corporation. This twin tax model includes both the rent-based valuation and unit area assessment and this gives the taxpayers an option to continue submission of tax according to the set rule or to switch over the new one.
The Kolkata Municipal Corporation took this decision as the property tax payment has fallen down since the introduction of UAA [Unit-based Area Assessment]. A part of homeowners’ switched to UAA however others paid the dues according to the rent-based valuation. There are many who did neither, and this lead to decline in property tax collection.
One of the officials in the revenue department said that we decided to shelf the earlier rent-based valuation system as the tax submission number remains poor even after two years of the introduction of UUA.
The official said that the Government can’t do away with the rent-based valuation to determine property tax as that it would have incurred greater revenue loss. Also, since 2017, the department extended the property tax submission deadline under UAA thrice. Unfortunately, the situation has not improved and hardly 10% of the property owners switched to UAA till now.
In the last financial year, there was a 20% drop in the submission of property tax as least owners applied for the Unit Area Assessment [UAA]. Fortunately, the payment of arrears by the Union Government helped KMC to fill the tax gap.
Since then, the Kolkata Municipal Corporation decided to send tax bills that are calculated according to the rent-based valuation system.
A team of officials suggests keeping the both tax calculation system running as they visited multiple cities and checked implementation of UAA.
The officials also said that the Delhi’s model to implement UAA also struggled initially but they continued the older system parallel to evaluate the tax collection.