THE TT Manufacturers Association (TTMA) has called for government to exclude the housing of plant and machinery in the calculation of property tax, as it contributed suggestions for the 2021-2022 budget, scheduled to be laid in Parliament on October 4.
Calculation of plant and machinery "has a direct impact on the competitiveness of the business community and incentive to reinvest in the company," said TTMA president Tricia Coosal.
The TTMA suggested that government place greater emphasis on closing the loopholes for those who continue to evade the tax net, rather than putting an additional burden on compliant businesses.
In the 2020-2021 budget last year, Minister of Finance Colm Imbert revealed the plan to start collecting the property tax, with the objective of beginning in fiscal 2021. Imbert said the tax collection would begin with residential properties, and commercial, industrial and agricultural properties would follow shortly after.
Two Mondays ago, the Ministry of Finance announced that the Commissioner of Valuations required every owner of residential, commercial or agricultural land, or a combination of any, to provide a return containing the particulars of their properties by November 30.
The exercise is to be carried out under the section 29 of the Valuation Act.
Section 16 (l) requires owners of commercial properties to include in their returns the value of plant, machinery, pipelines, cables and fixtures.
The TTMA also suggested VAT refunds should continue to be paid and that the Forex Facility operation at EXIMBank should be extended.
It commented, “This facility has worked exceptionally well and has directly contributed to the success of manufacturers and exporters during the first six months of 2021, allowing for exports to grow despite the challenges caused by covid19.
The TTMA also endorsed recommendations made by Amcham last week, which included the development of a recovery fund.
“This fund must not compete with commercial rates with the terms and conditions allowing for relative easy access, with due diligence and risk assessment being established.”
It suggested that government make rates for investment in industrial parks less burdensome to further incentivise the business community.
The TTMA commended government for its commitment to manufacturers in 2020 with the increased allowable rate on wear and tear on equipment from 25 to 30 per cent.
It said it had also recommended this move to improve cash flows "and we are happy to see this initiative taken up by the minister"