People should not prepare themselves for lower land and building taxes.

"You mark my words. The same thing that happen with the pension will happen with the property tax," a highly sceptical Opposition Leader Dr Keith Rowley said yesterday.

"But I will await the budget (tomorrow) to see what it says," he added.

He was asked to comment on Prime Minister Kamla Persad-Bissessar's announcement that the land and building tax would be reduced and there would be a moratorium on the payment of these taxes for this fiscal year (2010).

Speaking to the media on Sunday, Persad-Bissessar stated that Government was reverting to land and building taxes, and that Cabinet had decided to lower the land and building taxes because the former People's National Movement administration had revalued lands and the prices were increased.

"So even going back to the old land and building taxes, people will be paying more. So what we decided to do is we'll lower the rates. So we are lowering the land and building taxes... (And) for 2010 there will be no (land and building) taxes, we are not going retroactive... we will begin from 2011, so you have a moratorium for 2010 in a sense," she said.

However, the statement has puzzled Rowley. Yesterday, he noted that three months after assuming office, the Government still had not repealed the Property Tax Act, which it had promised to do. "The lower rate of land and building taxes (to which the Prime Minister is referring) is to lower to what?" he asked.

He said her statement did not say whether the valuations (done under the PNM) would be altered. He called on the Prime Minister to explain whether it would be a lower rate on a higher (valuation) figure.

On the moratorium, he said the question had to be asked why, in a budget in which Government was stating that it was hard-pressed to find money, it would give away a $100 million in revenues forgone from this year "on a tax that everybody is accustomed to paying"—land and building taxes.

"So the more they try to become smart, the more they are playing the fool, with foolishness and all because they would not speak the truth. So don't be surprised if they come with another argument saying we didn't promise so and so... on the property tax. They are just not to be trusted," he said.

"Given the position that the Prime Minister has taken and is taking with respect to the commitment on old age pension, where truth and commitment seem to be in short supply, I will wait to see exactly what is put in the budget (with regard to the property tax).

"I would not be surprised if they take the same approach to property tax as they took with the old age pension—which is to attempt to hoodwink the population outside of an election campaign. It is only from that understanding that one can appreciate what the Prime Minister said about the pension and what this very confusing statement about the property tax (means)."

An economist yesterday said with Government very hard-pressed to earn revenues next year, with oil revenues down and VAT down, he was very surprised that in spite of this, it was talking about leaving a potential source of revenue untapped and of reducing that revenue.

"All I can say is that they are probably confident that they would put a more efficient tax administration in place. If that happens, non-oil taxes could double and this could be an answer to the revenue problem they are facing," the economist, who requested anonymity, said, adding that this was one of the goals of the Revenue Authority.

Contacted yesterday as well, former finance minister Karen Nunez-Tesheira said she had no idea what the Prime Minister was talking about. She said the PNM government had already reduced the rate of the taxes on property to three per cent across the board. (The updated valuation, however, raised the quantum of the tax).

"Is the Prime Minister saying that the rate would be lower than three per cent?" Nunez-Tesheira asked.

She said the Government was playing smart with foolishness and trying to bamboozle people. Nunez-Tesheira, who recalled that she was consistently referred to as "tax-sheira', said she always knew that Government would not remove taxes on property. She said whether one called it "land and building tax" or "property tax", a "rose by any other name, was still a rose".

"Whether they call it land, building or property tax, it is a tax on property and there is a relationship between the tax and the valuation of the property... They must think the people are so gullible... This is an indication that they did not understand the responsibility of governance," she said.

She said after taking a policy position against the property tax, Government has spent months "hemming and hawing", rather than "abolishing" it.

The property tax, which was passed under the last government, saw a proposed increase in revenue from land taxes as a consequence of the revaluation of properties. The measure, which was highly unpopular, was one of the major contributors that led to the defeat of the last administration. The People's Partnership promised to rescind the tax.