Tamil Nadu Urban Infrastructure Financial Services ... - Municipal

Year
Exhibit 6.4 Property tax - analysis of key revenue drivers
Collection Efficiency Properties
Arrears Current Total Numbers Tax/property
Growth
Rate Of
properties
Growth
Rate of
Current
Demand
2002-03 27% 53% 39% 15644 920 NA NA
2003-04 54% 65% 60% 16363 865 5% -2%
2004-05 42% 60% 51% 17330 838 6% 3%
2005-06 49% 58% 54% 17826 824 3% 1%
2006-07 53% 68% 61% 19375 758 9% 0%
Source: Krish-M
Percentage
80%
60%
40%
20%
0%
Category of Property
Exhibit 6.5 Property Tax - breakup of assessees (2007-08)
Number of
Assessments
CCP cum BP - Krishnagiri Municipality 38
%
Annual
Demand (In
lakh)
Residential 10011 50% 69.11 46%
Commercial 8915 44% 62.05 42%
Industrial 1030 5% 7.9 5%
State Government Properties 146 1% 9.94 7%
Total 20102 100% 149 100%
a) Increase in share of property tax –Share of property tax in total income from 29% in FY03
to 36 % in FY06, in spite of almost stagnant revenue from property tax.
b) Demand per assessment - Demand per assessment has actually fallen sharply from Rs. 920
in FY 03 to Rs. 758 in FY 07 and has thus offset the increase in number of assessments
leading to stagnant revenue over the last five years.
c) Low collection efficiencies - Collection efficiency is a cause for concern. While collection
efficiency in current demand has grown from 65% to 68%, recovery of arrears has declined
from 53% in FY 03 to 49 % in FY 06 and further marginally increased to 53 % in FY 07.
Overall collection efficiency has shown improvement from 39% in FY 03, but needs to be
significantly improved.
Property tax Collection Efficiency
2002-03 2003-04 2004-05 2005-06 2006-07
Arrears Current Average
%