The authorities have been attempting to justify their murderous property tax by arguing that values of properties have changed since 1948. They have astutely deciphered that properties have increased in value over the last 61 years.
No-one can deny that, of course, but is that all that has changed between then and now? My analysis suggests to me that so many fundamental changes have taken place in T&T since 1948 that the very concept of property taxes on residential properties needs to be revisited.
My understanding of how this government works is that most, if not all, taxes that are collected end up in the Consolidated Fund, and expenditure to finance their various activities is deducted from the fund. If that is so, then the landscape of taxation of today bears absolutely no resemblance to that of 1948.
VAT has been applied in this country for almost 20 years now. This means that every house that was built in that period and most of the services we use since then have been subjected to taxes. Which homeowner paid VAT in 1948?
Further, PAYE was introduced by the first Eric Williams regime and exceeded 30 per cent at one time. Which homeowner paid income taxes back in 1948? Additionally, today we pay NIS, Health Surcharge, Road Improvement, and a bundle of other taxes that were not applicable back in 1948.
Indeed, the propertied class of 2009 is completely different to that of 1948. Back then they were, in the main, a tiny elite group whose bourgeois status was closely aligned to the fact that they owned property, so that the ownership of the property and its value significantly determined their capacity to pay taxes and was also indicative of the State services they enjoyed.
Proximity to the city/town, schools, hospitals, and the availability of water, electricity, sanitation, etc, were critical to determining the value of the property and the taxes to be paid. To my mind, PAYE has replaced that as the indicator of one’s earning power and extracts more and more as earnings increase.
Today, thousands of ordinary working class people own their own homes. The value of properties today is determined by many other factors, including security, proximity to industrial estates, traffic congestion, etc. Let us take Tobago, for instance. Hundreds of foreigners have determined that they want to make the beautiful island their home and they are prepared to pay millions of dollars for it. Does it mean that the ordinary Tobagonian must be penalised by exorbitant taxes as a result?
What does it matter to the homeowner whether someone is prepared to pay $1 or $1 million per month to rent a house in their community? Should law-abiding citizens pay more taxes because drug money is being laundered? A home really provides the constitutionally guaranteed social benefit of shelter; any increase in value of the property is an unrealised gain that is of no benefit to the homeowner except when sold and then the tax net will deal with that.
The real issue here has less to do with ’modernising’ property taxes and more to do with the fact that the ’money done’. Our mono-crop economy can no longer provide the Government with income streams to take care of their insatiable thirst to spend on show pieces for the pleasure of the Emperor. It is ludicrous for the Government to claim that they now want to diversify the economy when the ’money done’.
Where are the hundreds of foreign business people who were sitting on piles of money just waiting to see if T&T could success- fully host the Summit of the Americas? Can the Minister of Energy cite our hosting of that conference and the Commonwealth Heads meeting as the incentive for the oil and gas companies to invest in T&T and not have to provide cash incentives from our already depleted income?
Sylvan N Wilson
St Margaret’s
