Property owners will be charged 10 per cent interest on property taxes which remain unpaid by March 15 annually, Finance Minister Colm Imbert indicated yesterday.
It’s among proposals to amend the Property Tax Act announced yesterday, as Imbert piloted this and amendments to the Valuation of Land Act in Parliament.
The Property Tax Act pertains to collection of the tax while the VOL Act involves mechanisms for value of land.
Before debate began, Opposition MP Ganga Singh unsuccessfully sought to halt debate on the bills, as he said the matter was in court under action filed last year by the United National Congress’ (UNC) Devant Maharaj. But Imbert said the mater wasn’t sub judice, since the issues in the amendments aren’t the same as Maharaj’s matter.
Imbert said the property tax is necessary, as T&T was experiencing financial challenges and had lost over $1 billion in the last nine years of the property tax waiver.
Property tax amendments mandate that the tax will be due payable by September 30 annually. Notice of unpaid taxes will be issued by March 15 annually. A 10 per cent interest fee will be incurred on taxes not paid by that date, Imbert added.
The Board of Inland Revenue can examine objections and decide if to increase or lower taxes. Refunds will be given if there are overpayments and the BIR will be mandated to make a refund within 60 days of an overpayment, he noted.
Imbert added that amendments will also close a loophole whereby some people have been paying tax on land and claiming the land.
Schools - including occupied tertiary institutes - charities and similar bodies will be exempt from the tax. Also exempt are elderly people unable to pay the tax. But if they die, the position of the people who inherit their property will be reviewed every two years to see if they’re entitled to a tax waiver. As an example of the tax, Imbert said a property whose rental is $3,000 monthly (with annual rental value of $36,000) will incur a property tax of $972 annually or $81 monthly.
Imbert said the VOL act used antiquated systems, caused much confusion and was “arbitrary” and there had never been complete valuation rolls in T&T. He cited different rates used for different parts of T&T. Imbert said once 50 per cent of properties in T&T are valued, the collection of the property tax will start.
Property owners - including those outside of T&T - will be notified by post of valuations. He said the VOL act had been silent on a basis for valuation for owners of town-houses, condominiums and multi-owner structures and they could have avoided paying property tax in the past. But he said amendments will ensure they pay in future. How they will be assessed and how tax will be collected will be done through the Property Tax amendments.
A new format for Valuation Return forms - allowing for more information and better due diligence - will be introduced. He said other forms lacked categories for commercial-industrial buildings. Penalty for failing to file returns will be increased from $500 to $5,000.
Owners will be allowed to file objections based on six areas, with a Valuation Tribunal before any court action. He said while he as Minister will appoint the tribunal, he cannot give them directions.
More burden on taxpayers - Rambachan
More burden on overtaxed population.
That was the view of United National Congress MP Suruj Rambachan on the two bills, which he said were very contentious. Rambachan predicted “a lot of reaction,” since he said Government hadn’t done a good job of educating the public on this.
Rambachan noted that Imbert said Government wanted to collect $503 million in property tax in 2017 compared with $71m collected in 2009. “That’s 700 per cent more in tax revenue. Where is that 700 per cent to be spread across, who’ll bear the burden?” he asked.
“Statistics show that 76 per cent of the population earns less than $6,000 monthly and if they have to pay $972 more in taxes - even paying $81 monthly - it’ll be a strain.”He added: “The cost of living and transport have gone up, people can’t get CDAP drugs and have to buy them. That $81 monthly is very important. People are paying higher health surcharges, personal income taxes, corporation taxes, Green Fund increases, tax at the gas pump, stamp duty, online tax - a plethora of taxes in T&T!”
Rambachan questioned how the interest on arrears of property tax would be handled. He said people already have to wait long periods for tax and VAT refunds.
“Let’s look at the other side of things and see how this is affecting the people!” he urged Government.