Covid hits North Delhi Municipal Corporation’s tax collection

New Delhi: Already facing mouting budgetary losses, the Covid-19 pandemic has further crippled North Delhi Municipal Corporation’s finances as it struggles to pay

New Delhi: Already facing mouting budgetary losses, the Covid-19 pandemic has further crippled North Delhi Municipal Corporation’s finances as it struggles to pay its employees and contractors. To aggravate the problem, property tax collection, one of the main components of the civic body’s income, in the first quarter is running short by Rs150 crore, say officials privy to the information.

HT Image

Senior officials in both South Delhi Municipal Corporation and East Delhi Municipal Corporation also admitted to losses due to the pandemic but refused to share financial data.

Civic authorities said that every year, the maximum amount of property tax is collected between April and June (the first quarter of the financial year) because of special discount of 15% offered by the municipalities.

But, the authorities confirmed that collection in these three months was “very less” due to Covid-19 crisis and technical issues people faced while submitting the property tax online.

Unable to meet its target, the North DMC has also extended its deadline for availing 15% rebate in property tax by one month till July 31. Officials said they have pegged the target for property tax collection 2020-21 financial year at Rs 1200 crore.

Explaining the deficit in tax collection, a senior north corporation official, who did not wish to be named, said Rs 85 crore was collected in April, May and June while the collection in the same period last year was around Rs 264 crore -- Rs 179 crore less. The revenue collection in the same head during the first quarter in 2018-19 fiscal was Rs 250 crore.

Officials said property tax collection in 2019-20 financial year was around Rs 600 crore, while in 2018-19 it was Rs 508 crore.

“Generally, maximum share of property tax is collected either in the first quarter (April-June) or in the last quarter (January-March) because rebates are provided in these periods. The tax collection remained minimal in the first quarter this year because of lockdown due to coronavirus pandemic. Because of the crisis, we have revised target for the first quarter to Rs 150 crore. After relaxations began in June, we started setting up camps in different parts of the city for offline submission of property tax but the collection was still low,” an official of the north corporation said requesting anonymity.

The North Delhi Municipal Corporation has been struggling to pay its employees including doctors, teachers, sanitation employees and civil contractors. According to municipal officials, there are around 12 lakh property tax payers under the north civic body’s jurisdiction but only 4.25 lakh regularly pay their dues. The annual income of the north civic body is around Rs 2,000 crore. This includes revenue collections from property tax, parking contracts, advertisements, stamp duty and aids from central and state governments.

“Due to Covid-19 crisis, we are facing a loss of over Rs 150 crore. Our income has been curtailed due to lockdown. For example, we did not get even a single penny during lockdown period from parking contracts and conversion charges,” Jai Prakash, mayor North Delhi Municipal Corporation, said.

Officials also said that the other reason behind low tax collection is “unfriendly” online tax submission process due to technical issues with the website. The residents had complained that they were not able to submit their property tax online as the website was slow and the process had become complex, which was not the case till last year.

Prakash said that corporation was working to solve the issue. “To boost our property tax collection, we are setting up camps where people can deposit their property tax. We have also extended the last date of availing 15% rebate on property tax by one month. It is now July 31. We are hopeful that we will be able to recover our losses by the end of this financial year,” he said.