The amount of uncollected council taxes and business rates is over £1 billion, described as a "scandal and disgrace" at a time of spending cuts.
Research for the GMB union showed a total of £1.08 billion of local taxes were not collected in England and Wales in 2010/11.
London had the highest amount of uncollected taxes at £239 million, followed by the North West (£153 million), South East (£136 million) and West Midlands (£102 million), the study found.
Paul Kenny, general secretary of the GMB, said: "It is a scandal and a disgrace, at a time when vital services for our elderly and our children in our local communities are being slashed due to government cuts in funding, that more than £1.082 billion in England and Wales is going uncollected in council tax and business rates.
"Feeble excuses about being unable to collect these taxes no longer wash. Urgent reforms to assist hard pressed council staff to collect these taxes are long overdue.
"It is high time that local and national politicians threw their weight behind GMB's campaign for changes in the law relating to the way these taxes are collected rather than dismissing the GMB figures as distortions or exaggerations as many of them will do."
The highest amount of uncollected council tax was in Birmingham (£33 million), followed by Westminster (£29 million), Manchester (£18 million) and Leeds (£15 million), said the report.
Communities and Local Government Secretary Eric Pickles said: "Every penny of council tax that isn't collected means higher council tax for the law-abiding citizens who do pay up on time.
"Councils with an efficient collection service are able to set lower council tax bills for everyone or spend more money on frontline services such as bin collections.
"It is important that councils are sympathetic to the vulnerable and families who are struggling with genuine hardship, and don't overuse bailiffs.
"But a lot more could be done to improve the back office service, especially in Labour councils, which have the worst collection rates."