Property Tax showdown today
Finance Minister Karen Nunez-Tesheira
Heat inside and outside Parliament as debate on the controversial Property Tax begins. There has been a public outcry over the new legislation.
A massive demonstration is expected outside Parliament today as the Government begins debate on the highly controversial Property Tax.
The People’s Democracy, the National Joint Action Committee(NJAC)and the Opposition Congress of the People(COP) intend to march around the Red House while the Bill is debated.
The Property Tax which was forewarned in the 2009-2010 Budget in September as a new means of valuing properties has been seen in many quarters as a piece of legislation which, if implemented in its current form, would be burdensome to the lower and middle classes.
The legislation proposes to tax properties on an annual rental valuation basis of three per cent. It will replace the current land and property tax system that is over 60 years old where property owners, in some instances, paid less than $100 annually.
The problem with the new tax is that some people, particularly, those with small or fixed incomes could be paying 15 times more, in some instances.
Government proposes to introduce the new tax from January 1.
With Government announcing a fiscal deficit of $7.7 billion in the budget, some people see the imposition of the tax as a means of Government finding money to run the country and it is believed that the property tax might rake in between $3 billion to $5 billion.
With billions spent on educational and social programmes and with incomes $5,000 monthly or less not being taxed, the Government had, partly, to make up for the shortfall.
Respected commentators like former senators John Spence and Dr Julian Kenny and university Professor Dennis Pantin.
Professor Spence feels that “the introduction of the property tax will create many inequities and will affect lower income folk more severely.”
He sees the Government taxation programme as regressive in that it affects the poor more than the wealthy.
Dr Kenny goes into the technicalities that the Ministry of Finance will encounter and warns serious problems will arise “both with using location and ignoring individual circumstances.”
He argues “what must take the cake is the actual rental value expected to be earned on such a property (owner occupied).”
Professor Pantin notes that “one over-enthusiastic technocrat is quoted as stating that the Finance Ministry has been working on property valuation update for the past four years.
“Yet, the current proposal is for use of rental not property values. Moreover, values- even if rental- from four years ago, when the boom was very much at its peak, are not going to be relevant today.”
Callers to talk shows on the electronic media are all agreed on an updating of property taxes but feel that the current increases are too steep and that the tax should be gradually increased over time.