After negligible income during lockdown, MCG earns ₹18 cr in June

After collecting a sum of merely ₹12 lakh in property tax dues in April and May, the Municipal Corporation of Gurugram (MCG) procured ₹18 crore in June and ₹6 crore

After collecting a sum of merely ₹12 lakh in property tax dues in April and May, the Municipal Corporation of Gurugram (MCG) procured ₹18 crore in June and ₹6 crore in just six days in July. The uptick in the revenue collection happened only after the civic body introduced a rebate scheme in the last week of May to encourage taxpayers to clear their dues, said officials on Monday.

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Nearly 90% of the civic body’s revenue comes from property taxes. On May 23, MCG introduced a 25% rebate scheme after it realised that it has not earned any significant revenue during the lockdown period and was staring at a possibility of depleting its cash reserves. The rebate percentage offered by MCG is the highest ever since the civic body came into existence in 2008.

“We wanted to make the payment of property taxes lucrative for taxpayers. As such, we offered them a 25% rebate scheme. In addition to this, taxpayers who cleared their dues in the 2020-21 fiscal were also offered an extra 10% rebate. All these measures have significantly boosted our revenue collection. In just the first six days of July, we have recovered more than ₹6 crore of dues, averaging more than ₹1 crore per day,” Dinesh Kumar, zonal taxation officer, MCG, said, adding that the rebate scheme is valid till July 31.

At the start of March, just a few weeks before the nationwide lockdown came into force, MCG had set a target of collecting around ₹800 crore in the 2020-21 fiscal. This is more than three times its average collection of ₹250 crore in the previous three fiscal budgets.

For instance, in the 2017-18 fiscal, MCG had collected ₹342.24 crore in property tax — its highest ever collection. Since then, the civic body had failed to meet its ₹250-crore target in the next two fiscals. As such, it had set more than triple the usual target in the 2020-21 fiscal in order to recuperate some of its previous losses. Till now, the civic body has collected nearly ₹25 crore.

In order to meet the fiscal target, MCG has identified 197 property owners in the city, who owe more than ₹20 lakh each to the civic body. Another set of 243 properties has also been identified, who owe between ₹10-₹20 lakh in property tax dues. The civic body has sent notices to all the defaulting tax payers.

Moreover, for the first time in its operational history, the MCG had also sent notices to 150 liquor shop owners, asking them to clear their decade-long property tax dues. MCG officials said that work on recovering dues was temporarily halted during the lockdown period, but has started since then.

On Friday, during a press conference, MCG commissioner Vinay Pratap Singh also reiterated the details regarding the rebate scheme and further said that the civic body will be rewarding 5% of the total amount of taxes collected from a locality to its RWA, provided that the residents’ welfare body has ensured more than 80% collection from its residents. The money will be used by the RWA to install and upgrade sanitation, composting and waste management facilities in its locality.

As per officials privy to the matter, all these steps have been initiated to ensure that the MCG does not face a cash crunch deficit, which in turn would severely impact the maintenance and upgrade of the civic infrastructure in the city.