Home' Trinidad and Tobago Guardian : July 14th 2013 Contents A6
Sunday Guardian www.guardian.co.tt July 14, 2013
The Government has lost $600
million in the non-collection of
property tax over the last three
years says Finance Minister Larry
Howai. And now, he is considering
bringing back the tax---if not in the
2014 budget, sometime thereafter.
"Given what I am seeing, it s prob-
ably unlikely that you would get any
kind of property tax on residential
properties because the length of time
it will take to bring those up-to-
date. So it is very unlikely that you
would see any kind of land and
building taxes at that level for a
"But again, I want to put a cap
on what I said because as we (Gov-
ernment) go through the discussions,
if we come up with a possibility, we
may certainly explore those. One
could see something happening in
the budget. At this stage, it is difficult
for me to say with any degree of
finality that anything could happen
This was Howai s response when
asked if there were plans to bring
back the tax in the 2014 budget.
"It is very likely that somebody
could come up with some bright
idea of how they could do certain
things. So I don t want to discount
any of those things. As we go
through the next few weeks and we
(Government) carry on the discus-
sions on the property tax, or what
we are going to do, or how we are
going to do it, if there is going to be
one and if it could be done, I prob-
ably would not want to go any fur-
ther with that at this stage, until
such time we firm up the arrange-
ments and perhaps, we can then say
something in this year s budget."
Howai's biggest hurdle...
Govt can face judicial review
Howai said his biggest hurdle was
that the rules of the taxes first needed
to be updated, as different properties
carry different values.
It may take as much as two years
to get the rules updated as homes
in each community have to be val-
"For example, one person may be
under a 1990 rule, while another
person may be on a 1970 or a 2000
rule. So therefore, the valuations
may be different. So you can be pay-
ing a substantially greater tax than
your next door neighbour even
though the properties may be the
Failure to address the issue, Howai
said, can result in the Government
facing possible judicial review from
"It s not that we are facing judicial
review. There is a potential for judicial
review if we implement the tax in
a way that became inequitable...sim-
ply because the rules have not been
updated. On that basis, we are saying
we need to sort that out first before
we could implement that tax."
Though updating the rules started
a while ago, Howai said it fell through
the cracks in 2010.
The delay was caused when the
People s National Movement (PNM)
brought legislation under the Prop-
erty Tax Act of 2009 that would
have essentially provided new rates
upon which properties would have
The legislation was passed in
This prompted former deputy
leader of the Congress of the People
(COP) Prakash Ramadhar to launch
an "Axe the Tax" campaign.
The People s Partnership in its
2010 manifesto had also promised
to rescind the tax if voted into office.
Howai said last year he assessed
the overall position and was unable
to proceed with the issue, but he
has been trying to put measures in
place to tax everyone on a consistent
One of Howai s options was to
deal with the tax on a phased basis.
"This is under consideration."
If the tax is imposed this year,
Howai said citizens would not pay
for the period 2010 to 2013.
"It will not be retroactive because
we have already given the waivers
for the years up to 2013. In any event,
retroactive tax is not a good tax."
Asked how soon citizens were
likely to see property tax being
imposed Howai said, "I need to have
some more discussions with the
commissioner of valuations to deter-
mine what his time frames might
Public consultation at all levels
Howai said before a decision is
taken, there would be public con-
sultation at all levels.
"I think what we need to be very
clear on is there is no land and build-
ing tax that will be punitive in nature.
That will be a heavy burden on indi-
vidual households and so on. Nev-
ertheless, we recognise the fact that
the Government provides services
to homes. These services throughout
the world are taxed. The cost of these
services continues to increase. As
the cost increases one has to deter-
mine how you will meet the require-
ments and to provide a service that
are levelled... that the consumer feels
acceptable. In order to do that, you
have to generate some level of rev-
enue to be able to cover the costs."
Insisting that the matter had not
yet been discussed by Cabinet,
Howai said one needs to have a tax
that is fair, equitable and transpar-
In order to introduce the tax,
Howai said all the mechanisms and
systems needed to be in place to
ensure it is properly done and every-
one understands the necessary details
He explained that residential, busi-
nesses, industries and agricultural
lands would be charged different
$189m-$200m in taxes annually
Under the old land and building
taxes, Howai explained, the Gov-
ernment earned between $189 to
$200 million annually.
For the last three years, Howai
said on average "$600 million" in
revenue was lost.
"This is a pretty fair sum for us.
It is something we have to look at.
Some people say in the context of
the national budget $200 million
out of $50,000 million is not a big
number. But I don t think so. Every
hundred million adds up, so to speak.
We most definitely have to consider
how we are going to deal with that."
Questioned about the PP s promise
to rescind the property tax Howai
said, "I don t think they campaigned
on a platform that we should not
have any form of land and building
taxes because that always existed
before and it was never an issue."
Howai said property tax became
an issue because of the increased
rates when compared to what people
"And therefore, people saw it as
a very burdensome tax as it was
being introduced." He, however,
does not think there should be a sit-
uation where there is no land and
building taxes at all.
He thinks the rates of the old tax
need to be stopped, revisited and
revised to make it more relevant to
Asked if the matter was discussed
in Cabinet recently Howai said, "We
certainly have not discussed fiscal
measures for next year in Cabinet.
That is something that would not
be discussed any time in the near
future. When I say in the near
future... within the next two or three
weeks. Eventually we will have a dis-
cussion about it. Certainly, since I
have been there, we had some brief
discussions around it."
Ramadhar: COP stood
against PNM version of tax
Having fought against the PNM s
proposed tax rates, Ramadhar said
the COP stood against the PNM s
version of the tax, which would have
led to many citizens losing their
homes as a result of the exorbitant
"Their property tax had everything
to do with arbitrary valuations, and
that the money raised from taxes
would not have gone into the com-
munities from which the taxes were
raised but would have gone into the
Ramadhar said many of their cit-
izens had expressed the view that
they want to pay property taxes, but
it must be fair with a proper assess-
ment and that they must get benefits
from that tax.
"So these are the philosophical
issues that we will look at and see
if there is to be the return of a tax-
ation on property. We ve had the
land and building taxes. So we have
to be careful of the term and it is
not associated with the PNM s ver-
Ramadhar said the COP stands
firm with fairness and equity and
"to ensure that we are not taxed
without property representation."
Govt loses $600m in revenue
...Howai to bring back property tax
President of the Joint Consultative Council for the Construction
Industry and chartered surveyor and managing director of Raymond &
Pierre Ltd, Afra Raymond on his afraraymond.com Web site in
December of 2010 stated that he was in support of the proposed
changes to the property tax system as being long overdue.
In a previous article in 2009, Raymond explained that the estimates
of revenue published by the Ministry of Finance, in 1995 property tax
was 2.0 per cent of tax revenue and in 2009 it was expected to be a
mere 0.18 per cent.
"Proportionally speaking, property tax is now less than one-tenth the
size it contributed 15 years ago. Even when one takes into account the
predicted increase in property taxes to $325 million in 2010, the
proportion contributed by this source is expected to be 1.06 per cent of
the whole tax revenue. Now, while this dramatic decline in its
proportions is also due to the immense increase in the size of other
types of tax revenues, there are other aspects which are revealed on a
closer examination. When one considers the immense stores of wealth
which are held in property, beyond the basic family home, it is sobering
to realise how little the sector contributes to tax revenues."
'I don't think they campaigned on a
platform that we should not have
any form of land and building taxes
because that always existed before
and it was never an issue.'
Finance Minister Larry Howai
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