NMC Planning to Hike Property Tax by 36%
Nashik Municipal Corporation (NMC) is planning to hike property tax by 36 per cent from 2015-16 onwards. This proposal was put forward in the budget for the next fiscal year, which was presented by municipal commissioner, Praveen Gedam, for approval. Panel Chairman Rahul Dhikle reviewed the proposal at a special meeting at the standing committee hall at Rajiv Gandhi Bhavan, NMC headquarters. The increase in tax is estimated to garner Rs 45 crore for the NMC.
Nashik Municipal Corporation has been facing a shortage of funds for its civil projects and for its share in the Kumbh Mela. The corporation had yet to collect enough revenue from LBT (local body tax). This move by the NMC is expected to give it the necessary fillip required to increase its revenue.
For the last few years, the NMC has been facing a loss in revenue. In the financial year 2012-13, NMC earned about Rs 1,000 crore through a variety of taxes: octroi/local body tax (LBT), property tax, water tax, development and other taxes of the town planning department. In 2013-14, NMC made only Rs 914 crore, a revenue decline of 9 per cent. In the current fiscal, NMC earned Rs 575 crore from April to December, and this figure is expected to reach Rs 800 crore by the end of the fiscal year. This still shows a year to year decline in revenue by the NMC.
However, the property tax collection shows a year to year increase. This was possible because of the deliberate efforts taken by NMC towards increasing their property tax revenue. During the current fiscal year, the officials have been distributing property tax bills from the beginning of the year. There was an innovative initiative to divide the property tax into 6 monthly bills. Also, a penalty of 2 percent per month was active, if the tax was not paid within the stipulated time. To increase convenience, the NMC tied up with ICICI bank, so that tax payers could easily pay their taxes at bank branches closest to them. NMC is planning to take legal action against defaulters.
The people of Nashik know that the NMC is not projecting idle threats when it comes to legal action. Last year, property tax defaulters were issued final notices and warrants. People feared confiscation of their properties due to non-payment, and paid their property taxes.
NMC has 3.67 lakh residences across its six divisions. Taxes are also collected for 72,035 properties in Nashik East Division, 34,872 in Nashik West, 74,113 in Panchavati, 63,674 in Nashik Road, 39,921 in Satpur and 83,003 in Cidco. Based on property tax collected from April 1 to September 24, 2014, Panchavati, Cidco and Nashik West were the top localities, in order, for property tax revenue.
From the Corporation’s point of view, this increase in property tax is past due. Nashik’s property tax has not been increased in the last 15 years, in spite of stamp duty statement of rates increasing 10 times in the same time period. Earlier, residential property tax in the non-gaothan areas was Rs 5.6 per square meter, and Rs 4.4 per square meter in the gaothan areas. From April 1, 2015 onwards, both non-gaothan and gaothan areas will be Rs 7 per square meter in the municipal limits.
Along with this increase in property tax, the NMC is also looking at making sure that water connection owners pay their water taxes. In 2013-2014, NMC employees were busy conducting census of financial, industrial and the backward classes and could not focus on collection of water tax. Water tax income for the corporation decreased over the last three years, and there will now be an added impetus on following-up with defaulters.
The property owner in Nashik will thus have to re-adjust his budget in the coming year, with this increase in focus of water tax and increase in percentage of property tax.
Increase in property tax, LBT, Nashik Municipal Corporation, Nashik West, property tax, property tax revenue
