KMC plans to introduce new method of assessing tax from April 1

The Kolkata Municipal Corporation (KMC) has planned to introduce Unit Area Assessment (UAA), the new method of assessing tax, from April 1, 2016.

Mayor Sovan Chatterjee said the KMC was all set to introduce such new system to stop corruption in the revenue department and was likely to augment the tax collection.

The KMC so far calculates the annual propety tax of premises virtually arbitrarily.  The general revaluation (GR) is calculated once in five years. In case of non- tenanted residential buildings, the property tax is hiked by 10 per cent in every fifth year. Such guideline was issued by the then mayor Kamal Basu in 1985.

In case of tenanted buildings particularly in north and central Kolkata where old tenants occupy the premises, it has often been found that the property tax is more than the rent received by the owners. Such owners stop paying property tax and are not interested to avail the tax waiver scheme as the property will not fetch any profit.

However, the problem crops up in case of marriage houses and shops at various shopping malls. In case of marriage houses, the owners never disclose the actual rent they receive for letting out the property. 

In Kolkata, there are quite a few marriage houses which are let out for Rs 5 lakh per day. But the owners produce rent received of Rs 50,000 and on the basis of this the annual property tax is calculated. The KMC has calculated that marriage houses are let out for 200 days on an average every year. But in practice, they are let out for more than 300 days annually and this is how it badly affects the KMC’s revenue collection.

In case of shops in malls, the tenants show false receipts and KMC tax is calculated on its basis.

As there has been no proper guideline, property tax of flats had been often calculated arbitrarily. It was often found that two flats in the same building with equal size and having used the same construction materials were calculated differently. The aggrieved flat owners often moved the assessment tribunal for redress.

Mayor said as the KMC was against tax hike, the revenue collection process should be streamlined. He felt that the new system would help augment revenue collection without affecting the people. 

“People want better facilities and we are committed to do it. Restructuring of revenue collection system is required to satisfy people.”

According to UAA, the property tax will be calculated on the basis of various parameters like proximity of the property from the nearest metro station or bus stand, width of the roads, where slums exit in the area, distance of the property from markets or hospitals etc. Property owners will now be able to calculate the tax of their properties.

It may be recalled that the Asian Development bank, while giving loans to KMC in 2005, had urged the civic authorities to take steps to streamline the revenue department. 

The then Left Front controlled civic board had set up a committee that came forward with the idea of UAA. Meetings were held with house owners and their suggestions were also incorporated.