Home' Trinidad and Tobago Guardian : September 19th 2013 Contents to contribute the most significant portion
of the property tax pie. It is expected that
the value of their plant, machinery and land
would be the most significant of those to
be taxed," she said.
West said that PwC is willing to assist
the Government in reviewing the legisla-
"PwC would first and foremost like to
assist by reviewing the draft legislation
before it is passed to ensure that there are
no obvious flaws, ambiguities and onerous
provisions. We are often not given the oppor-
tunity to do so. Once the legislation is enact-
ed we would seek to educate our clients and
the wider population as to how the tax is
to work, including how valuations will be
conducted, if the information on valuations
is available, what items are impacted, what
rate(s) apply and how their individual lia-
bilities are to be calculated," she said.
She also said it would give all stakeholders
the opportunity to ascertain whether any
opportunity exists for tax mitigation, assist
with compliance in terms of timely and
accurate filings and payments and assist
with audits, assessments and any other
challenges raised by the tax authority.
Taxes and investment
Hugh Howard, president, American
Chamber of T&T, explained the terms
"housed" and "unhoused" equipment that
would be taxed.
He said "housed equipment" refers to a
manufacturing plant and the equipment
that are physically located in a plant.
He said "unhoused" equipment would
be like barges and other equipment not
located in a manufacturing plant.
"Both housed and unhoused would be
taxed. If you have a drilling rig that may
cost US$20 million and you are putting a
tax on that based on a formula of a per-
centage of the value, that could be extremely
high and could make essence of the oil com-
pany uncompetitive. It means the cost of
producing your oil is going to be escalated
due to that tax plus other elements that go
into taxation," Howard said.
He called for the Government to provide
more details soon.
"Nobody is philosophically averse to prop-
erty tax. What people are saying is how the
Government will be determining the value.
Equipment is neither land nor building,"
Howard said. "This is what we need clar-
He said it is important that manufacturers
and all stakeholders understand the impli-
cations of the proposed tax.
"I expect this would be modified as the
country needs sustainable development. We
need both foreigners and local people to
invest and the country needs to export as
that is the only way to grow. But if what
the country produces in non-competitive,
who is going to buy?"
An ANSA McAL perspective:
Gerry Brooks, chief operating officer,
ANSA McAL Group, said the taxation system
must be modernised before anything is
"The land and building tax must be
accompanied by an overhaul of the Town
and Country Division and also the Valuation
Division. These departments must be
strengthened and modernised. They must
be put it online and the audit and Exchequer
Act must be modified to allow electronic
"Regularisation must also occur to ensure
that the land management and ownership
issues are resolved. The WASA billings will
also have to be reviewed and moved to a
consumption basis. The current modus of
annual rateable will have to be changed to
align with the new land and building struc-
Brooks suggested that July 2014 was an
ambitious date and should be defered to
facilitate proper review, consultation and
careful holistic implementation.
Jean-Pierre du Coudray, managing direc-
tor, West Indian Tobacco Company Ltd,
said the company hopes the Government
implements a simple formula to allow com-
panies to calculate whatever model is used
"We await to see what format the land
and building tax will take and we hope that
whatever model is being used has taken all
the necessary considerations to avoid not
only out of proportion high payments, but
the methodology being used is simple
enough to allow us to forecast into the future
effectively and every year is not a guessing
He said the system in the past was "sub-
"In the past, there seemed to be some
level of subjectivity involved in the method-
ology being used, so it was difficult for us
to accurately forecast what the payment
will/should be, so we are hoping that the
subjectivity is removed and the calculation
method being used is simple and transpar-
ent," du Coudray said.
Imtiaz Ali, chief executive officer, Little
Angel Garment Ltd, said this is the first
time manufacturers would be paying such
"We pay taxes that are on the books right
now, like VAT, business levy, we pay the
trade fund, but right now we do not pay
taxes on machinery. We are not sure how
they will apply that tax on our machinery.
Of course, the BIR has records of all com-
panies who file. The challenge is those who
do not file. Also, we have no problem paying
taxes once it is across the board," Ali said.
BG6 | NEWS
BUSINESS GUARDIAN www.guardian.co.tt SEPTEMBER 2013 • WEEK THREE
The property tax which was an
initiative of the previous People s
National Movement administra-
tion and which had been axed
by the present Government has
been revived in the 2014 budg-
While the country is still waiting for details to be
provided on the Government s next move, different
business associations and the corporate sector gave
the Business Guardian their initial reactions to the
introduction of the land and building tax in last
week s budget presentation by Finance Minister Larry
This time the Government is introducing the tax
in different stages.
Phase one will begin next year with taxes on indus-
trial land including plant and machinery. The next
stage will be on commercial properties and the final
phase will focus on agriculture and residential prop-
erties, which will be completed in 2017.
Allyson West, partner at the professional services
firm PricewaterhouseCoopers (PwC), on Monday
explained that this type of tax does not apply only
to actual land and buildings.
"It also traditionally applied on anything that
enhanced the value of the building, such as plant
and machinery affixed to the building. That was
always included as a feature of the former land and
building taxes regime. However, the Government
seems to be going beyond that and taxing plant and
machinery, whether or not it is housed in a building.
There was always a debate with the Board of Inland
Revenue (BIR) as to whether plant and machinery
that is not housed in a building should bear the tax
under the old regime. We were of the view that the
tax did not apply to those assets. It appears that the
Government plans to clarify the issue and bring all
plant and machinery within the charge," she said.
West said more details are needed from the Gov-
ernment, but it seems that new tax will not resemble
what the previous government proposed.
"However, both the minister and the Prime Minister
suggested that the system to be introduced will more
closely resemble the old land and building tax regime
than the property tax that had been promoted by
the previous administration, although it is not clear
how," she said.
She said the Government has targeted industrial
property first as this is most likely to generate higher
"Many systems tax commercial, manufacturing
and/or industrial property at a higher rate than that
imposed on agricultural and residential property.
"The Government, however, has not confirmed
that this will occur under the proposed tax. In the
same way that they removed the subsidy on premium
gas because they expected that would impact the
higher income earners before they tackle the subsidy
on super gasoline and diesel, I think they are going
after the industrial sector because they are expected
PwC would first and
foremost like to
assist by reviewing
the draft legislation
before it is passed to
ensure that there are
no obvious flaws,
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