Demonetisation windfall: Civic agencies record 268% increase in tax collection | Latest News India - Hindustan Times
close_game
close_game

Demonetisation windfall: Civic agencies record 268% increase in tax collection

Hindustan Times | By, New Delhi
Nov 23, 2016 01:35 AM IST

Figures provided by 47 urban local bodies to the Union urban development ministry show their tax collection increased by 268% in November 2016 compared to the same period last year.

Civic agencies are recording a demonetisation windfall as people are taking advantage of schemes to clear longstanding tax dues with abolished 500- and 1,000-rupee notes.

Civic agencies are making a windfall as people are to clearing longstanding tax dues with abolished 500- and 1,000-rupee notes.(AFP Photo)
Civic agencies are making a windfall as people are to clearing longstanding tax dues with abolished 500- and 1,000-rupee notes.(AFP Photo)

But experts believe the returns don’t reflect improved efficiency in tax collection.

Hindustan Times - your fastest source for breaking news! Read now.

Figures provided by 47 urban local bodies to the Union urban development ministry show their tax collection increased by 268% in November 2016 compared to the same period last year.

These municipalities collected Rs 3,607 crore last November. But the corresponding figure till November 22 this year is Rs 13,192 crore already.

A majority of this tax has been collected after November 8, the day Prime Minister Narendra Modi announced scrapping of the high-value notes. The collection figures for the preceding months were far less.

Mumbai municipality’s tax collection has been Rs 11,913 crore this month, which way better than the Rs 3,185 crore it collected last November. Surat’s municipal revenue increased from a mere Rs 7.19 crore to Rs 100 crore.

The fantastic returns could be attributed state governments’ special schemes for taxpayers to pay their dues — some of which are said to have been unsettled for years — with the demonetised notes.

“This is the positive effect of demonetisation. People are clearing up their old dues, paying with Rs 500 and Rs 1,000 notes. For the urban local bodies, it has meant substantial mopping up of tax collection,” urban development minister M Venkaiah Naidu said.

But expert Srikanth Viswanathan, the CEO of advocacy group Janagraaha, called the increase in municipal revenue a reflection of people using up their defunct notes, rather than an indication of improved tax efficiency.

“The municipalities’ own revenues continue to be in the range of 1-1.5%, far less than in countries such as Brazil and South Africa. But the increase does reflect the huge potential from such revenues once the entire property tax administration is overhauled across urban local bodies,” he said.

Viswanathan said municipalities could transform the system by levying property tax on rational market-oriented base capital values, ensure a good tax assessment register and significantly improve their collection efficiency through spatial analytics and outsourcing.

* Figures till November 22, 2016 (HT Graphics)
* Figures till November 22, 2016 (HT Graphics)
Unveiling Elections 2024: The Big Picture', a fresh segment in HT's talk show 'The Interview with Kumkum Chadha', where leaders across the political spectrum discuss the upcoming general elections. Watch now!

Get Current Updates on India News, Election 2024, Arvind Kejriwal News Live, Bihar Board 10th Result 2024 Live along with Latest News and Top Headlines from India and around the world.
SHARE THIS ARTICLE ON
Share this article
SHARE
Story Saved
Live Score
OPEN APP
Saved Articles
Following
My Reads
Sign out
New Delhi 0C
Thursday, March 28, 2024
Start 14 Days Free Trial Subscribe Now
Follow Us On