Chamber wants clarity on property tax

It also expressed concern over the effect this tax might have on businesses.

In a release yesterday, the chamber admitted that Finance Minister Colm Imbert, in his budget presentation for 2016/2017, “put the population on notice that property tax will be reintroduced as a much-needed source of revenue. “Last week’s announcement by the Ministry of Finance, therefore, came as no real surprise.” The chamber pointed out that with the global decline in the price of oil and gas it is fully cognisant of the need for Government to find alternative sources of revenue.

And while it has no issue with the reimplementation of the tax, the chamber said it has challenged Government to be clear and transparent on the process, in a series of communiqu? last year, immediately after the minister’s initial announcement of the return of the tax.

“We were adamant then, as we are now, that any measure put in place should not result in the de-incentivisation of the private sector.” The chamber pointed out that considering the urgent thrust to increase non-energy exports and promote the manufacturing sector, “a six percent tax on industrial properties, which include the installed cost of plant, machinery and equipment, seems counter-intuitive to the desired outcome of incentivising investment. It might also be regarded as unnecessarily burdensome.” It said it was also concerned that average home-owners were in a quandary over, “the precise calculation of the Annual Rental Value (ARV) for their respective properties, as government has given no clear indication regarding how this is to be done. Add to that the fact that a significant percentage of our population comprises pensioners living off fixed incomes, (and) one can only hope that proper measures will be implemented for those most vulnerable in our society.” The chamber also urged Government to be transparent in the use of the funds collected through the tax, to avoid a situation similar to that of the health surcharge, “where there is a strong perception that the population does not receive good value for money.” Since the announcement last week, the chamber said, much had been ventilated about the property tax, and quite justifiably, the comments are largely calls for greater clarity and the elimination of much of the ambiguity surrounding the process.

“Government must waste no time in fully engaging the business community and the wider national community on this matter.

We call upon the Ministry of Finance, therefore, to take the lead on cogent discussions, informational sessions and public education campaigns to ensure that we are all on the same page regarding the new taxation mechanism.” The Chamber said it stands ready to assist as needed.