• Finance Minister & PNM Government Reneges on Property Tax


    Imbert Misleading the People about the Property Tax

    The PNM Government led by Prime Minister Dr. Keith Rowley and his Minister of Finance Colm Imbert must come clean on the Property Tax issue. The Movement for Social Justice (MSJ) charges the government with misleading the public on the issue of property tax.

    At a media conference on May 15th, 2016 the Minister of Finance stated the following: “The Property Tax due and payable in 2016 will be equal to the amount paid in land and building tax in 2009, will full implementation in 2017”.

    Prior to this, in the Mid- Year Budget Review presented on April 8th, 2016 in the House of Representatives stated the following "As indicated in the budget speech, we will shortly bring legislation to the Parliament to allow the Government to collect the amount payable under the old Land and Buildings Taxes for 2009. Madam Speaker, the Government is fully aware that the land and property valuation rolls are incomplete; and that it is quite possible that up to 40 per cent of properties in Trinidad and Tobago have not yet been assessed. However, a team is currently in the field doing assessments and we expect that 100 per cent of the assessments will be completed in 2017, so that the property tax can be fully implemented next year”.

    In other words, the stated intention and commitment of the PNM government was to make legal provisions so that property owners/occupiers would initially pay the amount of tax that they paid in 2009. Parallel to this, the necessary arrangements with respect to the full and proper valuations of properties would be put in place so that in the following year the new property tax would be implemented. This is not now the situation as firstly, no tax was collected in 2016 and secondly, from all the information presented to the country the intention is to fully implement the new property tax this year without the prior roll out of the having the 2009 land and building tax paid. The Government has reneged on a commitment that it gave in the Parliament and the citizens cannot allow this to take place.

    The Minister of Finance seems not to understand that any new fiscal measures that require the participation of citizens – whether as private individuals or business-people – must be properly communicated and implemented. This was clearly evident when the Minister decided to alter the VAT regime by simultaneously (a) reducing VAT from 15% to 12.5% and (b) removing hundreds of items from the zero- rated list. This caused both confusion for consumers and profiteering by some unscrupulous business- people. The result was that fair-minded business people were not on a level playing field; the government lost revenue that ought to have been paid and consumers were ripped off.

    The same situation faces us with the property tax today. Having heard absolutely nothing from the Minister of Finance re: property tax for many months the public suddenly saw ads in the press advising of a May 22nd deadline to submit the completed Property Valuation Return Form together with some 13 supporting documents – or face a $500 fine! There was no prior public education process so that citizens could be made aware of this requirement under the Valuation of Land Act. There was no information about how and when the actual new property tax would be implemented based on the valuations. There was no statement from the Minister to tell the country whether what he said in Parliament on April 8th is true – “a team is currently in the field doing assessments and we expect that 100 per cent of the assessments will be completed in 2017”.

    In the circumstances, what is now being attempted is nothing short of madness. Can the Valuation Division of the Ministry of Finance process the more than 500,000 forms with supporting documents? Do they have the requisite staff and data processing (ICT) capacity to engage in this exercise? What system is in place to cross-reference the forms submitted and the data supposedly collected by the “team in the field”? Why wasn’t this process initiated years ago so that today we could have fair, accurate and complete valuation data? It is the understanding of the MSJ that the requirement that property owners submit documents pertaining to their property is the result of Valuation of Land Act, which Act was amended by Act 17 of 2009. The amended Act was passed in the House of Representatives on December 11th, 2009 and in the Senate on December 29th, 2009 and assented to on December 29th, 2009. All of this was taking place during the “Christmas Season” when many citizens were otherwise preoccupied. Indeed, the infamous Property Tax was also being passed on the same days and assented to on “Old Year’s Day”. These pieces of legislation created huge opposition at the time, and the Political Leader of the MSJ (now) who was then the President of FITUN was arrested outside the Parliament and other trade union members/officers were physically assaulted during their peaceful protest against the legislation.

    In most progressive countries property tax is allocated not to Central Government but to Local Government Bodies. Indeed, the PNM's own position during the consultations on local government reform was that the property tax should go to the regional corporations. Today the cart is being put before the horse as it seems that the main driver of property tax is need for the Minister of Finance to raise revenue. This is wrong. People should be able to see where their property tax $ are going – to improve community services.

    Having regard to all the circumstances surrounding the issue of property tax, the MSJ now demands: - On what objective basis will the Valuation Division fairly assess the annual rental value of properties? And will there be equity of treatment for pensioners and others who today are in difficult financial circumstances? - That the Minister of Finance fulfills the commitment made in the Parliament that property owners/occupiers will pay the 2009 Land and Building Tax amount for 2017. - That if this is not the case, then the Minister and the Cabinet be brought before the Privileges Committee for grossly misleading the Parliament. - There be a proper education/information process to enable property owners to comply with the requirements of the valuation of Land Act, as amended in 2009. - That the Minister informs the country as to the capacity of the Valuation Division to process all the forms and supporting documents and to give a realistic deadline for the submission of same. May - 22nd is not a realistic deadline and must be altered; - That further, that the Minister informs the country on the confidentiality of the information submitted to the Valuation Division (e.g. copies of deeds can be digitally altered to aggravate the land fraud that now abounds; estimates of property values/photos of properties can be used to target persons for robbery and other serious crimes) - That the new property tax only go in to effect when the process of local government reform is completed so that the municipal corporations can have access to the taxes for the delivery of services to their burgesses. - That the roll out of the new property tax take place in fiscal 2018 after all the necessary checks and balances have been implemented.

    The MSJ is of the considered view that there must be some form of property tax. Indeed, it has always existed in the form of the Land and Buildings Tax. Such a tax can be fair since those who are wealthy and own properties of significant value will pay more than those who are less well-off and who own less valuable property. It also means that many who do not pay taxes can be brought into the tax net. The issue is therefore not about whether there should be a property tax or not. The issue is firstly, how it is being done and whether it will place an unfair burden on some while others get away lightly; and secondly whether it is just a method to raise revenue or to be part of a wider reform of local government.

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