Home' Trinidad and Tobago Guardian : May 4th 2017 Contents MAY 4 • 2017 guardian.co.tt BUSINESS GUARDIAN
VERBATIM | BG11
Historical evolution of property tax
Property taxes are not new to
T&T. Indeed, the only real form
of taxation prior to the 1966 Fi-
nance Act post-Independence,
was the Land and Building Tax-
es Act (LBTA) which was intro-
duced in April 1920.
In 1920, T&T was an agrarian economy.
Our primary output and exports consisted of
sugar, cocoa, coffee and citrus. Therefore, this
tax was focused on what generated income in
those days; land and buildings. Additional-
ly, this system of taxation had the important
objective of registering and administering the
ownership of land.
As was customary in legislation of that time,
the rates were not percentages but actual dollar
values. Section 3 of the act speaks to an an-
nual tax of $10 per acre or part thereof up to
10 acres, rising to $15 for acreages more than
10 acres up to 100 acres, and $20 per acre for
acreages in excess 100 acres. In so doing, the
act recognised the principle of progression
and that those who owned the most, should
pay the most.
Section 3 b) sets a minimum tax where the
annual taxable does not exceed $24, a tax of 96
cents. Where the taxable value exceeds $24, a
tax of 7.5 per cent of such taxable value.
The LBTA also recognised the principle of
annual taxable value. This is defined in Section
2 as "gross rental value subject to the deduc-
tions and allowances in Section 10"
Section 9 gave the district revenue officer the
power to determine the annual taxable value of
the building "whether such building shall be
rented or not" and to consider the amount of
rent a tenant "may be reasonably expected to
pay for such a building and all the machinery
and plant therein."
This section goes on to indicate that the an-
nual taxable value of the building is determined
by the "purpose or purposes of the building for
which it is reasonably suitable" even though
it is not actually "used or occupied."
The act establishes the administrative
methodology and gives the district revenue
officers power to give notices and to levy for
non-payment of taxes.
But the buying power of $10 in 1920 is not
the same as $10 in 2009.
Incorporating a dollar figures in the body of
the act in 1920 ensured that inflation over the
intervening period of 90 years reduced these
figures to a peppercorn value.
By 2009 the revenue generated under the
Land and Building Taxes Act was insufficient
to pay for garbage collection services provid-
ed by the central government and municipal
corporations. In addition, the Municipal Cor-
porations Act gave those organisations the
power to collect rates locally. In at least two
corporations, the annual values were brought
up-to-date on different bases and rates.
As part of the effort to modernise the tax sys-
tem and ensure a uniform basis of calculation
and collection, the LBTA was repealed in 2009
and replaced by the Valuation of Land Amend-
ment Act and the Property Tax Act 2009.
It is to be noted that many of the current
concerns about "valuation and annual rateable
value" are principles which are contained in the
Land and Building Taxes Act. In other words,
the very issues on which taxpayers' regard as
being onerous are not new and are taken from
A comparison of the 2009 Property Act with
its predecessor will show that it has simply
expanded and updated the administrative areas
of the 1920 Act.
There are four issues of practical significance.
1.The 2009 Act has moved from fixed-dol-
lar payments to percentages.
2.The act moves from land and building
and differentiates agricultural, residen-
tial, commercial and industrial holdings. This
is significant and allows a more even differen-
tiation of the incidence of taxation.
3.It proposes that valuations on all hold-
ings should be brought in line with more
realistic, current valuations.
4.(An important change) The number of
properties or hereditaments now fall-
ing into the tax net have risen from 200,000
to over 500,000 properties.
Add to this the fact that property owners
have not paid taxes for the last eight years. This
has created resistance to change and, in some
quarters, an unwillingness to pay.
Overcoming the reluctance of property
owners requires a strong communication ef-
fort which demonstrates the value of a strong
land administration process and the benefits to
every citizen. It is also important to remember
that land is a key part of wealth and that money
knows no politics.
Mariano Browne, FCCA, is the managing partner
of Elida Management Services Ltd, and a former
Minister of Trade, and Minister in the Ministry
...why landscape is different today
Links Archive May 3rd 2017 May 5th 2017 Navigation Previous Page Next Page