Tax Net: North civic body looks to privatise property tax collection

The North Delhi Municipal Corporation is planning to outsource property tax collection to a private agency,to make the task easier for the civic body.

Written by Pragya Kaushika | New Delhi | Published: September 18, 2012 1:03 am

The North Delhi Municipal Corporation is planning to outsource property tax collection to a private agency,to make the task easier for the civic body.

The private agency will maintain assessment book,collect tax and deposit it with corporation. It will also carry out other tasks as assigned by a resolution of the Standing Committee.

The discussion draft for the public-private partnership,formulated for the councillors,said the agency could be a citizens’ welfare association,a scheduled bank or any person/agency. The agency would be paid collection charges.

V P Pandey,Deputy Chairman of Standing Committee (North corporation),confirmed that draft paper for privatisation of property tax collection is being discussed. “We believe that there are some administrative changes that should be done for effective functioning. We agree with the executive wing to hire an agency for tax collection,” he said.

The unified MCD had been discussing privatisation of property tax collection,as it could get tax only from 9 lakh properties. It collected a total tax of Rs 700 crore,while the estimated earning was Rs 2,000 crore.

“MCD wants a PPP for enhanced efficiency and effectiveness of the property tax collection system. It had also approached Delhi’s power distribution companies to manage the property tax collection system for it,” an official said.

As the tax is paid on basis of self-assessment,the agency would issue receipt of property tax returns and self-assessment tax to payers. The agency will need to submit a summary — containing name and addresses of the properties,names of taxpayers and owners,amount of tax,amount of interest and details of payment.

Service charges payable to agency will be based on identification of new tax payers and collection of tax from them,the draft paper said.

Property Tax department will provide the list of existing tax payers and Survey of India data.

“There are few remuneration models,which we are discussing with the councillors,and will soon formulate a policy to increase our tax collection,” Assessor and Collector (North corporation) M S A Khan said.

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