Vizag city‘s urban local body, the Greater Visakhapatnam Municipal Corporation, generates a staggering 30 percent of the total revenue collected by 110 local bodies in Andhra Pradesh. With the executive capital tag, GVMC would be sitting on a pretty large cash pile, enhancing its contribution to the state municipality tax collection. The other major contributing ULBs are from Krishna and Guntur with over Rs 100 crore.
Visakhapatnam is the biggest city in the state after bifurcation of undivided Andhra Pradesh and is also the most populous. Urban local bodies mostly generate revenue from property tax, water cess and other heads. While the proportional demand for 2020-21 was Rs 2,704. 41 crore, the contribution of Vizag was pegged at Rs 880.36 crore, a share of 32.5 percent.
Till February 22 this year, Rs 1,025 crore was already collected from property tax and water cess sources of which Vizag contributed Rs 261 crore, about 25.6 percent. Visakhapatnam prepares an annual Budget of around Rs 4,000 crore. The state government is planning to make the Urban Local Bodies self-sufficient with slew of revenue increasing measures. The Covid-19 pandemic has hit the municipality tax collection across the state. It fell far short of the target set in the financial year. The civic authorities also did not levy two per cent interest per month on late payment of property tax in order to encourage payment.
The department had taken up an awareness campaign among property owners about the series of incentives being offered by the government to taxpayers. They were also entrusted with the task of door-to-door visits to collect tax and this enabled some people who were unable to visit municipal offices for the same. Online payment of taxes also boosted collections.
Under the new property tax reform, the property tax would be 0.1 per cent to 0.5 per cent of the Capital Value for residential structures, and 0.2 per cent to 2 per cent for non-residential structures. The new tax hike would be limited between 10 per cent and 15 percent of the existing rate. According to the new property tax reform, only Rs 50 is levied as property tax for every house with a plinth area below 375 sq. ft. because the property rights will be given only if taxes are paid.