In an effort to address the current financial challenges, the Municipal Corporation (MC) has resolved to eliminate the 25% property tax concession previously granted to government buildings. Consequently, these properties will now be obligated to remit the full 3% service tax, thereby aligning their tax obligations with those imposed on commercial entities.
This decision was reached during a meeting of the MC House, where councillors underscored the urgent necessity to bolster the revenue streams of the MC. Until this point, government buildings had been paying only 75% of the 3% tax due to the 25% rebate. The financial situation of the MC has worsened, primarily due to the consistent failure of these buildings to fulfill their tax obligations. The MC disclosed that both government and commercial properties collectively owe approximately ?250 crore in property and service taxes, which constitutes a substantial portion of the MC’s annual revenue. Notably, ?187 crore of this amount is currently entangled in litigation or disputed cases, while residential properties are also responsible for an outstanding ?15.8 crore in unpaid taxes.
