Fenland residents owe £2.7 million in unpaid council tax.
Figures released by the Money Advice Trust show that Fenland District Council was owed millions in tax arrears at the end of the 2014/15 financial year.
Fenland will soon be launching a consultation on how it should save £1.8 million over the next three years.
A spokesman for the district council said: “The figure of £2.7 million is rather misleading because it refers to the total arrears going back many years.
“Also, only a small proportion of that money is due to Fenland Council – 85 per cent is due to other authorities on whose behalf we collect the tax, notably the county council and the police and fire authorities. In fact, we have a very good council tax collection record.
“Last year we collected 97 per cent of the amount due that year and we’ll continue to chase the remainder.”
The Money Advice Trust also discovered Fenland had made 2,042 referrals to bailiffs to recover debts in the 2014/15 year and 1,939 of those were down to unpaid council tax.
The council spokesman said: “While making every effort to ensure that everyone pays their council tax, we also continue to do all we can to protect vulnerable people who may be struggling to make their payments.
“As part of that policy, we and our partners in the Anglia Revenue Partnership have recently brought our debt collection service in-house to shield people from the big increases in the statutory fees charged by enforcement agencies.
“At the same time, if someone is having real problems, officers will seek to help them by referring them to debt advice agencies and by setting up realistic payment arrangements.
“We impose enforcement charges on debtors reluctantly and only as a very last resort when all other attempts to collect the money owed have failed.”
Joanna Elson OBE, Money Advice Trust chief executive, said: “Councils are facing significant funding pressures – and they of course have a duty to collect what they are owed.
“In the case of council tax this is crucial in ensuring proper funding for the services people rely on.”