Valuation of Land (Amendment) Bill, 2023 passed...Chambers concerned over property tax

THE House of Representatives on Wednesday passed the Valuation of Land (Amendment) Bill, 2023 signalling the introduction of property tax.

The highly-debated bill was passed by an 18-14 vote, with the Opposition voting against it.

The bill, under Clause 5, repeals and replaces section 7A of the Act by introducing specific categories of land namely: residential land, commercial land, industrial land and agricultural land to be valued for the Valuation Roll to take effect. The Valuation Roll is a listing of properties in the country that have been assessed and valued by the Commissioner of Valuations, which is then used to determine the annual rental value of each property and calculate the property tax payable by the owner.

The business chambers have shared their reactions to the passage of the bill and indicated the implications it would have for the business community.

TIMING CONCERNS

The Chamber of Industry and Commerce said they understand the need for implementation of property tax but noted with concern, the financial impact it may have on citizens at this time.

President Kiran Maharaj in a comment said, “We are aware that the revenue generated from the property tax is a necessity to pay for services and operations of local government bodies, and hope 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 home-owners would make it difficult for them to meet existing commitments.

"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.”

She added that the chamber 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.

Also sharing concerns about the timing was the Fyzabad Chamber of Commerce which called for the postponement of the bill until the population can recover from covid, escalation of food prices and the stagnation of salaries.

“We have no problems with paying more if we are receiving more.”

That chamber's president Angie Jairam said, “We believe there should be improvements in the delivery of public services, impacting positively in the daily lives of people before these taxes are implemented.

"We need improved road networks, drainage to help with flooding, a proper working postal services, efficient water and electricity service, more ambulances, security measures and the decentralization of government offices for the ease of doing business.”

TTMA: EXCLUDE PLANTS, MACHINERY

The TT Manufacturers’ Association (TTMA) said it looks forward to the operationalisation of the TTRA which will allow Government to place greater emphasis on closing loopholes for those who continue to evade the tax net, rather than putting additional burdens on compliant businesses.

TTMA president Roger Roach said, “When consideration is given for the applicability of this framework on the business community, we will continue to advocate for our members and in this regard, we will press for the consideration of the exclusion of plant and machinery in the calculation of property tax.”

Cunupia Business Chamber president Shareeza Ali said, “The chamber believes the bill is a good venture but it's not the right time to impose any new tax. It would be a burden on the citizens and business owners to pay additional taxes.

"Business would be greatly affected as other utility bills are going up and the cost of living is very high. A lot of business have had to close down due to covid and now with this additional tax it would be a disaster, especially the small-business owners who would suffer the most.”

RE-EVALUATE USE OF RENTAL VALUE

Couva/Pt Lisas Chamber of Commerce president Mukesh Ramsingh in a comment said, “The chamber understand that property tax has to come into place and we are in full support of the funds going towards the municipal corporations.

"However, the chamber is lobbying that the rental value of a property not be used as it is an unfair and incorrect way to evaluate a property.

"Additionally, we also ask that the three per cent rental value be reconsidered at this time. We suggest it start with a one per cent-1.5 per cent and gradually increase to the three per cent.”

Commenting on the inflationary pressures, Greater San Fernando Business Chamber president Kiran Singh said, “The pandemic, which was only recently declared to have come to an end, left many businesses especially those in the MSME Sector in difficult economic conditions.

"As businesses emerge, the burden of an additional tax cannot be passed on to the tenant or even the consumer. There are no signs of decreasing food prices or transport costs. The RIC is recommending that TTEC increase its rates. The business community will be the most negatively affected by this measure.”

"Singh also raised the issues on how the land values being calculated, why should plant and machinery be included in the property valuation seeing that they have a much higher depreciation value compared to other assets, how much time will taxpayers be given to pay this tax and what would be the penalty for late payments.