xRecently-appointed Finance Minister Larry Howai says a more efficient and equitable property tax has to be reintroduced in the country.
"We have to bring back that property tax. It is costing the Treasury money (in lost revenue) that could be used to develop the country. I do need for us to revisit that property tax and consider introducing something more efficient, effective and more equitable than proposed previously," Howai told the Sunday Express last Wednesday, during an interview at his eighth floor office in the Eric Williams Financial Complex, Port of Spain.
The previous stance taken by the People's Partnership Government during the lead-up to the 2010 general election 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 it 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.
"Property taxes exist virtually all over the world because if you own a property, there is a cost attached to it at the micro and macro level: garbage, sewage disposal and everything that goes with maintenance.
"Trinidad and Tobago has had land and building taxes for more than a hundred years; it's always been there, and nobody was 'axing the tax' prior to 2010. I think part of the problem was how the whole issue was communicated.
"By and large, most people expect they have to pay some kind of land and building taxes, but what they felt was the last legislation probably may have been a little bit heavy-handed, and so they rebelled against it," he said.
Howai is clear that his duty is to get Trinidad and Tobago's economy growing again, even if that means he'll have to take some tough decisions.
"It is certainly a tremendous responsibility to move the economy forward," he said,
Howai understands he has come into the job with great expectations. The business community welcomed his appointment as did former colleagues in the banking sector and, most recently, the outgoing governor of the Central Bank, Ewart Williams.
Howai acknowledges, however, that transforming the economy is certainly not an individual effort. It will also likely entail the population making some sacrifices.
"I think everyone agrees the problems are manifest and obvious. Where they might disagree is how much of a contribution they have to make to adjust to achieve where we want to be.
"It will take some measure of goodwill on the part of everyone; perhaps I need to start speaking in terms of a longer horizon, instead of just an annual budget, because if people think they have to give up something, but they understand they are not the only ones to (make that sacrifice), and it's done equitably, then people will be more likely to agree.
"They mightn't be happy, but at the end of the day, the aim is a more developed country where we can all live comfortably," he said.
To that end, the country should expect a cut-back on the prolific Government spending on transfers and subsidies—including the $4 billion fuel subsidy.
"Transfers have become a major issue for us. Those transfers include not just individual subsidies but also to State enterprises which may be inefficient. That is definitely an area we have to look at, but I can't look at it collectively; we have to break it down into its component parts and figure out how we are going to deal with it," he said, adding a statement will be made about both issues in the Budget.
He also noted that while Trinidad and Tobago does have a high social spending bill, "there are very good reasons why governments try to shelter people at the lowest end of the scale—those who are old, infirm, incapacitated and so on. Government needs to play a role in sheltering that part of the pop, so, yes, you have to give consideration to that".
Before entering the world of politics, Howai, who trained as an economist at the University of the West Indies (UWI), was a banker for 32 years, the last 15 of which were spent leading State-owned First Citizens.