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Property Tax Revenues Can Off-Set $7bn Budget Deficit | | | Author: Stephen Kangal | | Date: 2009-09-18 00:00:00 |
| Property Tax Revenues Can Off-Set $7bn Budget Deficit
I am now convinced that the proposed draconian property tax is conceived to defray most of the estimated $7bn budget deficit in the face of an aggressive attempt to bring all residences including those of the new HDC settlements, agricultural lands including the Caroni two-acre farms and new business places into the tax net. One will recall the hike in the price of premium gas last fiscal to cover the costs of the $500m Summit of the Americas. CHOGM is next.
Valuation firms will including Raymond and Pierre, whose senior partner, Mr Afra Raymond has been the principal protagonist/ spin doctor of the tax on behalf of Government will be rewarded with lucrative consultancies/contracts to undertake the rent assessment/determination process. Neither the Valuation Division of the Ministry of Finance nor the proposed BIR/ T&T Revenue Authority will possess adequate in-house resources/expertise to accelerate the requisite assessment/listing process.
At present on the basis of the dribbles of the details given, the existing house and land taxes contribute $125m annually .The estimated increases by way of the new property tax will be at least 1000% in the urban-sub-urban areas. It will be more than 2,000% in the rural areas. Mine will 2300%.
Let us use a realistic conservative figure of a 1500 % increase on the taxes to be paid on current properties based on the current list of known listed, assessed and under-valued properties on the books of the respective BIR Warden Offices. Having regard to the high level of rents advertised daily in the classified columns of the print media that cannot be ignored by the BIR where one bedroom flat located in the East-West Corridor can fetch as much $3,000 per month and $2,000 in the rural heartland, the new revenues to be derived from known listed properties will be around a little less than $2bn. That is astronomically way above the total expected property tax revenue provided by the Minister of Finance of $250m for all properties including the 300,000 unlisted.
But the Minister of Finance indicated that almost 300,000 of recently built, modern high rentable valued properties including HDC houses under the three-tiered tax system, from the 800,000 taxable properties located in T&T are outside of the existing property tax net. They do not pay tax. These can be brought into the new tax system by 2010.
This category of high value properties/ palatial residences/plant and machinery can potentially bring in revenues of $5bn if a uniform and consistent, objective, market-driven property tax-determination process were to be instituted and applied in an open and transparent manner based on high rentals prevailing across T&T. The property tax will in fact exacerbate an already escalating and over-heating high rental market now advertised in US dollars.
The responsible response in this guava season must be on progressive taxation and budget cuts of mega and wasteful projects – not on indiscriminate taxation without consultations by a discredited, cost-overruns stigmatised regime as if it is business as usual, Your Lordship.
The defence on behalf of the under siege mentality of the people rests its case pro bono.
STEPHEN KANGAL
CARONI
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| St James
The property tax on homeowners is going to hurt the retired owner who is now living on a fixed income. That fixed income might be $2000.00 a month from NIS. The house is modest, the tax is $45.00 a month. Change in life stile to live on $1955.00 a month.
Now for what nobody is talking about, or has it gone completely over their heads? This is the proposed Industrial Property Tax. I am surprised that none of the Chambers of Commerce have seen this. They have people there who are much smarter than me, but this is what I am seeing.
The small man with a printing press making Letterheads, Cards and Cashbooks, things like that. He is in a rented building which is now been accessed and landlord has passed on the Tax to him. His Plant and Machinery cost him $2 million. So the tax on that is $120,000.00. He must now find another $10,000.00 each month, plus what the landlord has passed on, to give to the government. Tell me if I am wrong!! Unable to find new customers to increase sales, he must either raise his prices or shutdown. It is not just the little printer that will be affected. The cost of everything that touches machinery on its way to the consumer will gp up. UHT milk, Toilet paper, Flour, Bread and Crix to name a few. You can think of at least another six.
Can you find the money to pay the squanderer another $11 million so that his wife can have new drapes??
Time to take to the road again people.
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