Interest waiver on property tax arrears helps improve collections in AP

Vijayawada: Waiver of interest on arrears of property tax, up to March 31, 2023, has helped AP improve its tax collections to an extent of Rs. 1,780.41 crore in the current fiscal -- against last fiscal’s Rs. 1,316.83 crore. The total tax collections went up by 35.20 per cent in the state this financial year.

The department of municipal administration and urban development issued an order on March 16, offering to waive the interest on the arrears and on the current demand of property tax up to the year 2022-2023 as a one-time settlement across municipalities and municipal corporations. This was on the condition that the assessee pays the total arrears and current year’s tax in one lump sum on or before March 31, 2023.

The GO was issued based on the feedback that the prevalence of Covid-19 had its adverse impact on property tax collections in two successive financial years 2020-21 and 2021-22. This resulted in huge accumulation of tax arrears in all urban local bodies.

The subsequent revision of property tax had also made its impact on tax collections in all ULBs in the state.

The municipal administration authorities say that as the property tax demand is generated for two half years. The first half year covers  April to September and the second half year starts from October 1 and ends on March 31 the next year.

A simple interest at the rate of two per cent per month will be charged in case of any failure to pay property tax by June end for the first half year and by December end for the second half year. This resulted in the piling up of property tax arrears.

“We gave wide publicity on waiver of interest on tax arrears. A good number of property owners volunteered to clear their tax dues in one go, resulting in a collection of a substantial sum. The state government had targeted to collect a property tax of Rs. 3,763.51 crore and got Rs. 1,780.41 crore, which is 47.30 per cent of the targeted collections,” officials said.

On Tuesday alone, the collection was Rs. 44.54 crore against a collection of '18.27 crore on the same day the last fiscal.

The district-wise cumulative collections from April 1, 2022 to March 28, 2022 were: Srikakulam Rs. 32.33cr, Vizianagaram Rs. 44.34cr, Visakhapatnam Rs. 371.16cr, East Godavari Rs. 68.57cr, West Godavari Rs. 55.54cr, Krishna Rs. 49.76cr, Guntur Rs. 175.10cr, Prakasam Rs. 50.63cr, Nellore Rs. 90.55cr, Chittoor Rs. 43.48cr, Kadapa Rs. 82.24cr, Anantapur Rs. 67.67cr and Kurnool Rs. 89.86cr – forming a total of Rs. 1,221.24crore.

A private sector employee from Vijayawada, Sobhan Kumar, said, “The interest waiver gave a good relief to me and other property owners especially from the middle class families. We cleared all dues to avail the benefit.”

A municipal administration official said, “The waiver of interest on property tax dues has improved tax collections. With just three days to go for closure of the current fiscal by March 31, we hope the rest of the property owners too would come forward and clear their dues.”