The Gov­ern­ment col­lect­ed $143 mil­lion in 2009, the year that the old Prop­er­ty Tax­es end­ed.

The cur­rent es­ti­mates of the Prop­er­ty Tax to be col­lect­ed are to the tune of $504 mil­lion an­nu­al­ly, so that is about three-and-a-half times more than what prop­er­ty own­ers paid in 2009, ac­cord­ing to Afra Ray­mond, char­tered sur­vey­or and man­ag­ing di­rec­tor of Ray­mond & Pierre Lim­it­ed.

The rev­enue lost over the last 12 years since the ax­ing of the tax could be more than $5.50 bil­lion, Ray­mond es­ti­mat­ed.

Ray­mond, a past pres­i­dent of the Joint Con­sul­ta­tive Coun­cil for the Con­struc­tion In­dus­try (JCC), said the move to im­ple­ment the Prop­er­ty Tax would be wide­ly un­pop­u­lar at a time of many burn­ing is­sues, in­clud­ing the COVID-19 pan­dem­ic and the ex­ist­ing so­cio-eco­nom­ic sit­u­a­tions.

Ray­mond be­lieves that with on­ly a slim par­lia­men­tary ma­jor­i­ty, the in­tro­duc­tion of the new Prop­er­ty Tax will be a con­sid­er­able gam­ble for the Gov­ern­ment.

T&T is get­ting set to rein­tro­duce Prop­er­ty Tax as one of the rev­enue streams which is ex­pect­ed to bring in mil­lions of dol­lars for the Trea­sury.

While there is no spe­cif­ic date giv­en for the roll­out, the Gov­ern­ment has start­ed lay­ing the foun­da­tion. They are at­tempt­ing to pop­u­late the val­u­a­tion roll. The Gov­ern­ment has put out ad­ver­tise­ments call­ing on cit­i­zens to file in­for­ma­tion on prop­er­ty and land own­er­ship with the Val­u­a­tions Di­vi­sion, Min­istry of Fi­nance (MOF). If cit­i­zens fail to do so by the end of No­vem­ber 2021, they can face a fine of $5,000.

With this move, Prop­er­ty Tax can be levied on res­i­den­tial and com­mer­cial prop­er­ties and agri­cul­tur­al lands.

Ray­mond felt that the ob­jec­tions from the Op­po­si­tion Unit­ed Na­tion­al Con­gress el­e­ments are be­mus­ing, to say the least. This, he said, is for two rea­sons–"First­ly, the of­fi­cial record of tax col­lec­tions from 1993 to 2009 as shown in the graph and ta­ble be­low. When the UNC was in pow­er in the sev­en-year pe­ri­od 1995-2001, there was a dra­mat­ic and un­ex­plained de­cline in the col­lec­tions of Land & Build­ing Tax­es, which are col­lect­ed in the non-mu­nic­i­pal ar­eas. That de­cline was re­versed when the UNC left of­fice.

“Sec­ond­ly, the Peo­ple’s Part­ner­ship (PP) used ‘Axe the Tax’ as a strong slo­gan in the 2010 gen­er­al elec­tion which they won with 29 out of 41 seats. With that rare three-fifths ma­jor­i­ty in hand, there was tremen­dous scope for the PP to have law­ful­ly changed or re­moved any laws or arrange­ments it wished, with­out any need for PNM sup­port. Like the Prop­er­ty Tax, for in­stance. But that nev­er hap­pened, for what­ev­er rea­son.”

Afra Raymond

Ray­mond an­swers ques­tions on Prop­er­ty tax

You are of the view that the re­vi­sion of the prop­er­ty tax is long over­due, can you elab­o­rate on the need for this, please.

Yes, Prop­er­ty Tax is long over­due. The last time Prop­er­ty Tax was col­lect­ed in T&T was in 2009, so 2022–which is next year, which is what is un­der dis­cus­sion–would make that a to­tal of 12 years that no tax­es were paid by prop­er­ty own­ers. By any mea­sure, that is a tremen­dous ben­e­fit that has been en­joyed by prop­er­ty own­ers. In the pre­vi­ous tax­a­tion sys­tem, the prop­er­ty tax­es were called House Rates for the five Mu­nic­i­pal­i­ties and Land & Build­ing Tax­es for the oth­er parts of the coun­try. The five mu­nic­i­pal­i­ties are Port-of-Spain, San Fer­nan­do, Ari­ma, Point Fortin and Ch­agua­nas.

The national totals of Property Tax paid in the period 1993-2009.

Tak­ing in­to con­sid­er­a­tion the dras­tic neg­a­tive eco­nom­ic im­pact of the COVID-19 pan­dem­ic, how do you feel about the rein­tro­duc­tion or ag­gres­sive lay­ing of the foun­da­tion re: val­u­a­tion log to be com­plet­ed by No­vem­ber and the push­ing of the Rev­enue Au­thor­i­ty Bill at this par­tic­u­lar time, is the anx­i­ety lev­el among cit­i­zens jus­ti­fied?

Apart from the tru­ism that at any time most tax in­creas­es will be op­posed, we are now in very try­ing times in which the very sys­tem has been test­ed at every lev­el–so­cial, eco­nom­ic, med­ical/sci­en­tif­ic, com­mu­ni­ca­tions. Whether it’s been test­ed to de­struc­tion and how we emerge from all of this re­mains to be seen. But the re­al­i­ty is that COVID-19 re­al­ly sharp­ened cer­tain se­ri­ous chal­lenges–we have been in de­cline for about a decade or more. There is tremen­dous, wide­spread and well-jus­ti­fied anx­i­ety.

That is the back­ground to the strong op­po­si­tion and con­cerns be­ing voiced about the re-in­tro­duc­tion of this tax...When the old prop­er­ty tax­es end­ed in 2009, a to­tal of $143M was col­lect­ed in that year. The cur­rent es­ti­mates of the prop­er­ty tax to be col­lect­ed are of the or­der of $504M, so that is about three-and-a-half times more than what was be­ing paid in 2009.

Ul­ti­mate­ly this will be a wide­ly un­pop­u­lar move at a time of many burn­ing is­sues, so with on­ly a slim par­lia­men­tary ma­jor­i­ty (PNM 22, UNC 19), that will be a con­sid­er­able gam­ble for the Gov­ern­ment.

Do you fore­see a con­sid­er­able chal­lenge for the TTRA giv­en the num­ber of cit­i­zens against the pro­posed re­new­al of prop­er­ty tax?

De­spite the range of ob­jec­tions, we need to be clear that the re­al fear of prop­er­ty tax is root­ed in the fact that a mod­ern trans­par­ent data­base will al­low our Rev­enue Au­thor­i­ties (ei­ther BIR or TTRA) to see the wider af­fairs of tax­pay­ers, es­pe­cial­ly the true lev­els of rental in­come earned on in­vest­ment prop­er­ty, on which in­come tax is sel­dom de­clared, far less col­lect­ed.

Please of­fer a per­spec­tive on prop­er­ty tax’s place with re­spect to tax rev­enue and the T&T Rev­enue Au­thor­i­ty (TTRA).

The Es­ti­mates of Rev­enue dis­close that in 1995 prop­er­ty tax was two per cent of tax rev­enue and in 2009 it was ex­pect­ed to be a mere .18 per cent.

How much rev­enue on av­er­age has the Govt lost over the last 12 years?

That fig­ure has al­ways been un­der­es­ti­mat­ed, in my view, but the loss of rev­enue over that 12-year pe­ri­od would be over $5.50 Bil­lion.

What the are modes of Prop­er­ty Tax?

There are four modes in which prop­er­ty is taxed in a mod­ern sys­tem:

Stamp Du­ty or Trans­fer Tax–This is the tax paid by the pur­chas­er when ac­quir­ing a prop­er­ty. This is the on­ly one of the four types of prop­er­ty tax that is work­ing to some ex­tent. That said, most lu­cra­tive prop­er­ty in­vest­ments are nowa­days held in com­pa­ny names so that they can be split and sold by trans­fers of shares, which at­tracts a frac­tion of the stamp du­ty payable on a sale of the prop­er­ty.

Oc­cu­pa­tion Tax–This is the tax paid for the length of time one owns or oc­cu­pies the prop­er­ty and this is the one be­ing re­vised now. It is called ei­ther Land & Build­ing Tax­es or House Rates un­der our laws.

In­come Tax on Rental In­come–tax­es payable on the in­come re­ceived from prop­er­ty rentals. This is poor­ly mon­i­tored at present.

Cap­i­tal Gains Tax–This is a tax paid on the prof­its made when the prop­er­ty is sold. CGT is on­ly payable here in the cas­es of prop­er­ty dis­pos­als tak­ing place with­in 12 months of ac­qui­si­tion. Few ven­dors dis­pose of the prop­er­ty with­in that time lim­it.

What is your view on the merg­ing of the col­lec­tion agen­cies–BIR, Cus­toms, in­to one unit to fa­cil­i­tate the func­tion­ing of the TTRA?

We are here con­tem­plat­ing a wide­ly-dis­cussed pub­lic pol­i­cy shift which is an es­sen­tial step on­to the path of mod­ern and ef­fec­tive Pub­lic Fi­nan­cial Man­age­ment. These com­bined and crowd-sourced agen­cies are re­al­ly the on­ly ef­fec­tive way to tack­le some of these big wicked prob­lems, hence the same mod­el was used for the Of­fice of Pro­cure­ment Reg­u­la­tion, which is al­so an in­te­gral part of mod­ern and ef­fec­tive Pub­lic Fi­nan­cial Man­age­ment. Crowd­sourc­ing refers to the use of whistle­blow­ers since those peo­ple are the most valu­able source of crit­i­cal in­for­ma­tion to stop white-col­lar crime, as all the re­search shows.

The Trinidad & To­ba­go Rev­enue Au­thor­i­ty:

The TTRA was launched in June 2009 and is in­tend­ed to be a uni­fied body to col­lect tax­es and cus­toms du­ties. The Board of In­land Rev­enue and the Cus­toms and Ex­cise Di­vi­sion are to be merged.

Some of the cit­ed ben­e­fits of the Rev­enue Au­thor­i­ty mod­el are im­proved rev­enue gen­er­a­tion and com­pli­ance with the coun­try’s rev­enue laws; bet­ter ser­vices to tax­pay­ers and traders; a more pro­fes­sion­al staff com­ple­ment; im­proved re­ten­tion of qual­i­fied per­son­nel; and, an im­proved ca­pac­i­ty to deal with cor­rup­tion. Those are ob­jec­tives with which I ful­ly agree and the Prop­er­ty Tax re­view un­der dis­cus­sion must be un­der­stood as a part of the tran­si­tion to the TTRA.

Property tax 1993-2009

Up to the start of 1998, the coun­try’s fis­cal year-end for na­tion­al ac­count­ing was De­cem­ber 31. There was a tran­si­tion be­tween 1998 and 2001, with pe­ri­ods to be read as fol­lows ‘1998’ is Jan­u­ary 1 to Sep­tem­ber 30 of that year: ‘1998/1999’ is 12 months end­ing Sep­tem­ber 30, 1999, and 1999/2000 be­ing 12 months end­ing Sep­tem­ber 30, 2000.

For more on this dis­cus­sion, please log on to afraray­mond.net