Wednesday, February 21, 2018

Property tax coming back


CNG-READY Frank Look Kin, left, special advisor in the Ministry of Energy and Energy Affairs gives Energy Minister Kevin Ramnarine an overview of the Compressed Natural Gas (CNG) equipped vehicle at the National Gas Company head office in Point Lisas Industrial Estate, Couva. —Photo: DEXTER PHILIP

Mark Fraser

The good news is the population will not have to face a sudden increase in fuel prices when the national budget statement is read tomorrow in Parliament by Finance Minister Larry Howai. 

“The price of gas will remain the same (after tomorrow)... We will take about two years to get everything going (with the implementation of compressed natural gas or CNG) before we see movement in the fuel subsidy,” he said.

Citizens can, however, expect tax reform, particularly new legislation that will enable a phased return of the infamous land and building taxes.

“The big issue for us is the updating of the property rules, the valuations, so all properties of similar types will be properly valued and that process needs to start. So we will be looking at the land and building taxes but probably we will do it on a phased basis that will be synchronous with the value of the properties,” Howai told reporters at an event at the National Gas Company compound, Pt Lisas yesterday.

He said the difference between this new proposed system and what had been proposed by the People’s National Movement in 2009/2010 was the issue of the rate and consultation. 

The previous stance taken by the People’s Partnership Government during the lead-up to the 2010 general elections was to campaign on an “Axe the Tax” platform. 

That manifesto promised to repeal the Property Tax Act of 2009, legislative reform that would have essentially provided new paradigms upon which property would have been taxed. 

The legislation was passed in December 2009 under the former People’s National Movement (PNM) government. 

The People’s Partnership Government has not sought to enforce the current legislation and has instead indicated its plans to bring legislation repealing the Act passed in December 2009 and to re-establish the property tax at the old pre-2009 rates. 

Property tax has not been collected since January 2010. 

Official figures show property taxes collected in 2007 amounted to $82 million. 

“It’s the same valuation but the difference or the issue with the PNM was the concern individuals had about the rate and the whole process of consultation. We will do it in a way where there is appropriate consultation in terms of the rate and not inimical to the growth of business and supported by homeowners without significant dislocation. As we phase it in (the rate) won’t be as significant as it could be in year one but as we continue the process it will accumulate and will be a reasonable contribution to the overall budge,” he said.

Howai said the tax system will “definitely” need tightening up, and he will speak to that in the budget. 

“There are some initiatives we are taking and have started taking. As I said last year we are going to start the process of bringing in international consultants to help us with that. In fact, the same day I read the budget (last year), I wrote the letter to the consultants to get the work going. They have actually submitted their reports—an interim report in January and a final report in April with a number of initiatives we are in the process of working through with a view to start implementing in the next fiscal year,” Howai said.