But efficiency improvements in tax collection could save councils £100 million a year, according to an Audit Commission study.
Councils spend around £400m collecting the council tax and the commission says there is scope for the majority to make savings.
Poll tax still accounts for the largest chunk of arrears at £1.3bn among the 314 councils surveyed by CIPFA. Businesses owe £742m in national non-domestic rates and £492m is owed in council tax. Councils are still owed £48m in domestic rates.
Head of CIPFA's revenues service Chris Stewart said the number of summonses used to collect tax had dropped from 7.7 million to under 2.2 million following the introduction of the tax.
The commission has calculated that £100m could be saved if all shire districts matched the performance of the top 33%.
The report said £200m was owed in council tax at the end of September last year.
The commission says collection rates are likely to be better in 1994-95. A total of 54% of the total tax had been collected by September - £150m more than the same time in 1993.
But success is not universal. By September 1994, 5% of councils had collected less than 90% of the tax due for 1993-94.
- Collecting local taxes - a management handbook. Price £15 from HMSO.
- Revenue collection statistics 1993-94 actuals. £80 from CIPFA, tel 0171 895 8823.