How effective will 60% hike be with Rs 1,055 cr tax still due?

In the RTI response,the AMC Assessor and Tax Collector estimated a Rs 93-crore additional income from the increased tax rates that have been applicable since April 2008. According to present calculations,Property Tax forms 70 per cent of the total tax revenue.

Acknowledging the fact that the tax collection efforts have been failing over the years,Assessor and Tax Collector Kalyan Shah said: “The collections has been slow as there are old mills that are lying closed or are under liquidation,plots with broken infrastructure and houses in slum areas where collection of taxes have been difficult. We manage to recover Rs 30 to Rs 32 crore in a year.”

When asked how much time AMC needs to recover the massive dues,Shah reasonsed: “As and when the owners want to sell these properties,they will have to clear the tax arrears.”

With the recovery of Rs 30 crore per year on an average,the recovery of total due tax will take another 35 years.

“An additional Rs 93 crore is now most likely pile up as well,while the public will end up paying excessive tax due to the inaction of the authorities,” said Mahendra Sawaj,who had filed the RTI application.

“What is the requirement of increasing the taxes if the authorities have been incompetent in recovering the tax in the first place?” he added.

For taxes pending upto the year 2000,under the Bombay Provincial Municipal Corporations (BPMC) Act,a 100-percent waiver on slums and chawls land and a 50-per cent waiver on commercial property were announced. The waiver adds up to Rs 150 crore. However,the department is not expecting the recovery to exceed Rs 400 crore.

U C Padiya,Municipal Commissioner (Tax) said: “As the old formula applies to most of the recovery amount,the recoverable amount may touch Rs 400 crore. The reason being that slum areas and mill lands will not fall under the recoverable land area and will get the waiver scheme benefit.”