The Madurai Corporation plans to implement a 6% increase in property tax starting from 1st October for the second half of the financial year. Opposition councillors criticise the decision for lacking adequate notice and burdening taxpayers again. Corporation officials anticipate collecting INR 230 crore in property taxes for 2023-24, with a target of over INR 260 crore for 2024-25, in line with the Tamil Nadu Urban Local Bodies Rules, 2023. Commissioner Dinesh Kumar defends the hike, citing the need for proportional tax collection to secure government funds. To encourage timely payments, the corporation offers incentives, including a 5% discount for early payers.
The Madurai Corporation is set to implement a 6% increase in property tax, effective from 1st October, for the second half of the financial year. Opposition councillors are criticising the decision, arguing that it was made without adequate notice and places an additional burden on taxpayers just a year after the previous increase.
According to corporation officials, INR 230 crore is expected to be collected in property taxes during the 2023-24 financial year, with a target of over INR 260 crore for 2024-25. They mention that this increase aligns with the Tamil Nadu Urban Local Bodies Rules, 2023, which require annual revisions of property values based on either the average Gross State Domestic Product (GSDP) growth over the previous five years or a 6% increase, whichever is higher, unless a general revision occurs.
M. Solai Raja, the AIADMK councillor and leader of the opposition, is reported to have condemned the hike, stating that during the AIADMK administration, taxes were not increased for ten years while maintaining robust finances. He highlights that property taxes have surged by 100% for residential properties and by 150% for commercial properties over the last 3-4 years. He urges the corporation to focus on recovering dues from major defaulters instead of increasing taxes for ordinary citizens and calls for a reassessment of commercial properties that are taxed at residential rates.
In defence of the increase, corporation commissioner Dinesh Kumar indicates that it is consistent with policies in other cities such as Chennai and is expected to generate an additional INR 23 crore in revenue. He notes that a recent reassessment of over 3,000 properties has added INR 7 crore to the collections. He explains that to secure tax-related funds from the central government under the 15th Central Finance Commission, it is necessary to collect taxes in proportion to the GSDP, making this increase essential to meet that requirement.
Despite these measures, the corporation continues to face challenges such as tax arrears, misclassified properties, and longstanding litigation. Some tax arrears are said to date back more than 50 years, complicating collection efforts. A tax appeal committee, established last year, is reportedly addressing these issues.
To encourage timely payments, the Madurai Corporation plans to keep tax collection centres open on weekends during the first two months of the financial year and will offer a 5% incentive, up to INR 5,000, for early taxpayers. Property owners who make payments by 31st October are expected to receive a 5% discount on taxes for the second half of the 2024-25 financial year.
In conclusion, the Madurai Corporation's decision to raise property tax by 6% from 1st October has sparked criticism from opposition councillors who argue it unfairly burdens taxpayers. While the increase aims to meet revenue targets and comply with state regulations, the challenges of tax arrears and property misclassifications remain significant. The corporation's initiatives to promote timely payments, including discounts for early taxpayers, may help mitigate some of the financial pressures faced by residents in the upcoming financial year.
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