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Wednesday, May 14, 2025

On the is­sue of prop­er­ty tax:

If not now, when?

by

714 days ago
20230601

Last week Wednes­day night, the Val­u­a­tion of Land (Amend­ment) Bill 2023 was vot­ed on, and ap­proved, by a 18 to 14 ma­jor­i­ty in the House of Rep­re­sen­ta­tives, bring­ing T&T one step clos­er to the rein­tro­duc­tion of a tax on prop­er­ty, which was stopped in 2009.

With ref­er­ence to the prop­er­ty tax, it is an his­tor­i­cal fact that the axe-the-tax cam­paign of 2009 and 2010 con­tributed to the Peo­ple’s Na­tion­al Move­ment ad­min­is­tra­tion be­ing vot­ed out of of­fice fol­low­ing the May 24, 2010 gen­er­al elec­tion.

The Con­gress of the Peo­ple (COP)–one unit of the Peo­ple’s Part­ner­ship coali­tion that formed the Gov­ern­ment af­ter the 2010 gen­er­al elec­tions–ini­ti­at­ed and led the “axe-the-tax” cam­paign, which was adopt­ed as pol­i­cy by the ad­min­is­tra­tion led by Kam­la Per­sad-Bisses­sar.

As a re­sult, in the first bud­get pre­sen­ta­tion af­ter the 2010 gen­er­al elec­tion, then Min­is­ter of Fi­nance, Win­ston Dook­er­an, who found­ed the COP, ful­filled the 2010 elec­tion cam­paign promise by ax­ing the prop­er­ty tax.

“The prop­er­ty tax will be re­placed by the old lands and build­ing tax­es regime at the old rates and old val­ues. There will be a waiv­er of lands and build­ings tax for the year 2010,” said Mr Dook­er­an, in de­liv­er­ing the 2011 bud­get on Sep­tem­ber 8, 2010.

Last Fri­day, the T&T Cham­ber of In­dus­try and Com­merce is­sued a news re­lease in which it ex­pressed con­cern about the tim­ing of the im­ple­men­ta­tion of the prop­er­ty tax on the cit­i­zens and busi­ness­es of T&T.

Fol­low­ing is the T&T Cham­ber’s state­ment in full:

“While the Trinidad and To­ba­go Cham­ber of In­dus­try and Com­merce un­der­stands the need for the im­ple­men­ta­tion of prop­er­ty tax, it notes with con­cern the fi­nan­cial im­pact that it may have on cit­i­zens at this time.

“We are aware that the rev­enue gen­er­at­ed from the prop­er­ty tax is a ne­ces­si­ty to pay for ser­vices and op­er­a­tions of the lo­cal gov­ern­ment bod­ies and hope that it is ex­e­cut­ed in an eq­ui­table man­ner based on the cri­te­ria laid out for charges to be ap­plied to prop­er­ties.

“The tim­ing, how­ev­er, is an is­sue as con­sumers have been hit by in­creas­es in costs and to in­sti­tute an ad­di­tion­al cost on home­own­ers would make it dif­fi­cult for them to meet their ex­ist­ing com­mit­ments.

“The T&T Cham­ber fur­ther hopes that it does not de­ter busi­ness own­ers from main­tain­ing their com­pa­nies’ plant and ma­chin­ery as well as up­dat­ing their in­fra­struc­ture to in­dus­try re­lat­ed best prac­tices. We have in the past called for a re­vi­sion of the six per cent tax on in­dus­tri­al prop­er­ties to ap­ply strict­ly to phys­i­cal prop­er­ty and not in­stall cost of plant, ma­chin­ery, and equip­ment in­side or out­side.

“We al­so main­tain the view that in­tro­duc­ing a top-line tax on busi­ness­es’ rev­enues may be a dis­in­cen­tive for fur­ther in­vest­ment in a time when the em­pha­sis is to cre­ate an en­abling en­vi­ron­ment for busi­ness growth and so have a rip­ple ef­fect of less tax­able op­por­tu­ni­ties for gov­ern­ment.

“To this re­gard, T&T Cham­ber looks for­ward to work­ing with the rel­e­vant stake­hold­ers and the Min­istry of Fi­nance to find a so­lu­tion to this mat­ter.”

Tim­ing of the tax

The T&T Cham­ber is par­tic­u­lar­ly con­cerned about the tim­ing of the in­tro­duc­tion of the new prop­er­ty tax regime.

So, T&T Cham­ber, which was es­tab­lished in March 1879 to lob­by on be­half of its mem­bers’ in­ter­ests, states that while it un­der­stands the need for the prop­er­ty tax “it notes with con­cern the fi­nan­cial im­pact that it may have on cit­i­zens at this time.”

The T&T Cham­ber al­so stat­ed: “The tim­ing, how­ev­er, is an is­sue as con­sumers have been hit by in­creas­es in costs and to in­sti­tute an ad­di­tion­al cost on home­own­ers would make it dif­fi­cult for them to meet their ex­ist­ing com­mit­ments.”

It seems to me, there­fore, that T&T’s pre­mier busi­ness or­gan­i­sa­tion has changed the axe-the-tax cam­paign to make it a call to axe-the-tax-now.

I have some ques­tions for the T&T Cham­ber:

1. If the tim­ing of the rein­tro­duc­tion of the prop­er­ty tax “would make it dif­fi­cult” for home­own­ers “to meet their ex­ist­ing com­mit­ments,” what is the busi­ness lob­by­ing group’s view on when would be a bet­ter time to im­ple­ment the tax?

Asked in the al­ter­na­tive, what is it that makes now a bad time to im­ple­ment a tax that has been de­ferred for 14 years, giv­en that the elim­i­na­tion of most of the COVID-19 re­stric­tions took place a year ago?

Would the in­tro­duc­tion of the prop­er­ty tax in 2010 have come at a bet­ter time than in 2023?

2. Is it the T&T Cham­ber’s view that the tax on res­i­den­tial prop­er­ties should be de­layed un­til the econ­o­my im­proves, when more peo­ple are em­ployed, or when the Drag­on field or Wood­side En­er­gy’s Ca­lyp­so nat­ur­al gas field go in­to pro­duc­tion?

Would the fi­nan­cial im­pact on cit­i­zens “at this time” be greater than in four years from now?

3. Is the T&T Cham­ber aware that the new regime is a pro­gres­sive tax, mean­ing that those who are wealth­i­er and have larg­er, more lav­ish prop­er­ties are sup­posed to pay a high­er tax than those who live in small­er, more mod­est ac­com­mo­da­tions?

Does the busi­ness group ob­ject to the pro­gres­sive na­ture of the tax?

4. Is the T&T Cham­ber aware that the new prop­er­ty tax regime al­lows home­own­ers, who have been as­sessed as hav­ing a prop­er­ty tax li­a­bil­i­ty, to ap­ply to the Board of In­land Rev­enue for a de­fer­ral of the tax “on the grounds of the im­pov­er­ished con­di­tion of the own­er and his in­abil­i­ty to im­prove his fi­nan­cial po­si­tion sig­nif­i­cant­ly by rea­son of age, im­paired health or oth­er spe­cial cir­cum­stances, that un­due hard­ship to that own­er would oth­er­wise en­sue.” (See sec­tion 23 (1) of the Prop­er­ty Tax Act)

Is the T&T Cham­ber aware that ap­pli­ca­tions for de­fer­ral shall be made on the pre­scribed form and shall be ac­com­pa­nied by ev­i­dence that the ap­pli­cant is in re­ceipt from the State of:

• A pub­lic as­sis­tance grant

• A dis­abil­i­ty grant;

• A se­nior cit­i­zen pen­sion;

• A T&T con­di­tion­al cash trans­fer card; or

• Does not re­ceive an an­nu­al in­come ex­ceed­ing the max­i­mum amount spec­i­fied in sec­tion 3 of the Se­nior Cit­i­zens’ Pen­sion Act (which I be­lieve is now $3,000 a month).

5. Is the T&T Cham­ber aware that the num­ber of peo­ple re­ceiv­ing so­cial grants from the T&T Gov­ern­ment (in­clud­ing pub­lic as­sis­tance, dis­abil­i­ty, food sup­port and se­nior cit­i­zens pen­sion) is 175,000, ac­cord­ing to Min­is­ter of Fi­nance, Colm Im­bert, in his 2023 bud­get pre­sen­ta­tion.

Is the Cham­ber aware that the 175,000 peo­ple re­ceiv­ing so­cial grants is equal to 16.13 per cent of the T&T pop­u­la­tion over 14?

By the way, and for con­text, Gov­ern­ment spends $5.4 bil­lion per year on so­cial grants, in­clud­ing se­nior cit­i­zens pen­sion at $4.3 bil­lion, food sup­port at $175 mil­lion, dis­abil­i­ty grants at $630 mil­lion and so­cial as­sis­tance grants at $355 mil­lion, ac­cord­ing to the 2023 bud­get speech. So­cial as­sis­tance grants ac­count for about 10 per cent of T&T’s to­tal ex­pen­di­ture.

So, if 175,000 peo­ple in this coun­try re­ceive so­cial grants from the Gov­ern­ment, and the Prop­er­ty Tax Act al­lows each of them to ap­ply for a de­fer­ral of their prop­er­ty tax, who are these home­own­ers for whom the in­tro­duc­tion of the new prop­er­ty tax regime “would make it dif­fi­cult for them to meet their ex­ist­ing com­mit­ments?”

Is it the teach­ers, sol­diers, fire of­fi­cers and oth­ers in the pub­lic ser­vice, whose unions have agreed, or will agree, to the 4 per cent wage in­crease of­fered by the Gov­ern­ment and who, as a re­sult, are due to re­ceive back­pay?

6. If the T&T Cham­ber is con­cerned that “con­sumers have been hit by in­creas­es in costs,” can it ap­peal to its mem­bers, who are in­volved in su­per­mar­ket and gro­cery trade, to con­sid­er rolling back some of their price in­creas­es as a re­sult of the glob­al re­duc­tion in the cost of ship­ping?

7. Fi­nal­ly, I am in­ter­est­ed in find­ing out from the T&T Cham­ber to what ex­tent is the in­tro­duc­tion of a top-line tax on the rev­enue of busi­ness­es a dis­in­cen­tive for fur­ther in­vest­ment? Does this per­tain to man­u­fac­tur­ers or to re­tail­ers and does T&T need more in­vest­ment in re­tail?


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