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Hardeep Singh Puri, minister for housing and urban affairs (Photo: Mint)
Hardeep Singh Puri, minister for housing and urban affairs (Photo: Mint)

Govt weighs property tax collection reforms

  • The reforms are aimed at enhancing the resources of urban local bodies, says union minister Hardeep Singh Puri
  • The suggestions include frequent property revaluations, simplification of billing, cutting down exemptions

NEW DELHI : The Union housing ministry is considering reforms to increase efficiency and transparency in property tax collection by urban local bodies (ULBs) to improve revenues and make them self-reliant.

If best practices are followed, it will enable ULBs to provide better services and infrastructure, said Hardeep Singh Puri, minister for housing and urban affairs. Puri, on Tuesday, chaired a meeting with urban development ministers of six states, including Gujarat, Odisha, and Punjab to discuss steps that can be taken to enhance resources for ULBs.

“Discussed reforms to increase efficiency of property tax collection to enhance the resources available to ULBs at a meeting of consultative group on property tax reforms comprising state UD ministers from Gujarat, Odisha, Punjab, Tamil Nadu, Tripura and Uttar Pradesh," Puri wrote on Twitter.

“Our discussions on best practices in property tax administration and statutory provisions will enable the ULBs to provide better basic services and infrastructure to citizens across states," he said.

The meeting was held against the backdrop of urban local bodies facing increased dependence on property tax after the implementation of GST. Property tax has become the mainstay of municipal corporations after the subsumption of local taxes, including octroi, entry tax, local body tax, and advertisements tax under the GST, according to a study of finance of municipal corporations in metropolitan cities. However, the report points out that there has not been any sign of improvement in property tax collections.

Some suggestions to increase property tax coverage include integrating information, revaluating property frequently, reducing exemptions and concessions, simplifying billing and payments, and ensuring strict enforcement measures.

“As recommended by the 15th finance commission, we discussed best practices in property tax administration and statutory provisions across cities and states. These practices will further enhance resources available to ULBs," said Durga Shanker Mishra, secretary, Union ministry of housing and urban affairs.

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