Property tax has two implications. First, it is the main source of income for municipalities, and second, it affects all citizens who own properties. It is therefore important that the property tax system should be efficient, transparent and easily understandable to the taxpayer.
In Bengaluru, an arbitrary system based on rental value was replaced by a transparent self-assessment system based on specific parameters, almost two decades back. This system has, by and large, been working well.
In 2016, BBMP revised the tax rates and also introduced some changes with reference to location and usage. This resulted in some errors in the calculation of tax in respect of several buildings. Although it was announced that the increase in tax would not exceed 20 per cent, there were a number of cases where the challans generated showed a manifold rise in tax. Those who had already paid the tax were assured that excess would be adjusted the following year. However, errors have continued this year leading to confusion and complaints.
The property tax system in BBMP is basically sound, but the internal administrative systems are weak. Three measures are needed to improve matters: 1) Fix the software glitches to prevent errors in calculation, strengthen the IT department in BBMP by employing the required experts, paying more, if need be; 2) Impart adequate training to the staff in the revenue department at all levels. Untrained personnel with inadequate knowledge of the manner in which the tax system works are contributing to much of the confusion; 3) BBMP must invest more in creating awareness among the citizens about the tax system, especially the changes whenever introduced.
A transparent and people-friendly approach will pay dividends through better tax collection and increase in revenues.
In a city with a population of 1.2 crore and over 17 lakh properties, it should be possible to double the target of `2,900 crore which should help in building better city infrastructure.
(The writer is a former Chief Secretary and BBMP Commissioner)