“Before property tax collection went online, everything was manual. went online, everything was manual. Getting an auditor to look into our books will help the system,” BBMP Taxation and Finance Committee chairperson M Shivaraju told ET. The auditors will look into tax collections of 2015-16 and the first quarter of the current fiscal.
BBMP Special Commissioner (Revenue) V Rashmi, who pushed for an independent audit as part of her efforts to clean up the system, said the civic body is looking to rope in a CAG empanelled audit firm to handle the task. “Property tax receipts have never been audited. Citizens get receipts for payments but whether the payments actually reached the BBMP’s nodal account is to be tracked and seen. This is being done for this year’s property tax collection,” she said.
Property tax is the only major source of revenue for the BBMP. Its track record in tax collection, how ever, has been dismal. In the past fiscal, the tax collection target was Rs 2,456 crore from an estimated 15 lakh properties against which the BBMP could collect only Rs 1,900 crore. For 2016-17, the property tax potential is pegged at Rs 2,400 crore. As on June 30, the BBMP has collected Rs 1,260 crore, Shivaraju said. It is estimated that the actual tax potential is Rs 4,000 crore.
The BBMP, according to Rashmi, is also simultaneously putting in place a system for auditing the 16.5 lakh property tax payments of 2015-16. “Reconciliation with the banks and compilation are two major weaknesses in the BBMP revenue department that we hope to address,” she said. “We are looking to bring in a system of concurrent reconciliation with the nodal banks” she said.
The revenue department has listed out problems in property tax collection, some of which the CAG empanelled CA is expected to look into. “We’ve discovered that properties paid taxes through hand receipts and some of them having credit of taxes are shown as defaulters,” a source said.
Srikanth Viswanathan, head of advocacy and reforms at Janaagraha, called it a positive move in the short run. “Audits are not a substitute for effective and efficient accounting. That requires modern accounting rules, processes and systems with qualified finance staff,” he said.