Property Tax Act a white elephant?

In fact, it is neither fish nor fowl but in reality it has become a white elephant. In the sentiments of the king of Siam, it’s an elaborate venture that proves economically insignificant or useless — no one wants it but keeping it can ruin you.

The annual taxable value and the three percent tax rate, with little or no concessions, is a system first introduced by Augustus Caesar centuries ago based not on what a farmer produced but what a farmer could produce.

There were other public statements by the minister: * Property tax will be reintroduced from January 1, 2016, using old levels and old rates as starting point. There will be special provisions to ensure the elderly and indigent with low fixed incomes will not have an advantage wherever they reside.

*Taxpayers have enjoyed a moratorium on the payment of property taxes for a six-year period (2010-2015). This has resulted in a loss of revenue of at least $1 billion.

* The waiver will not to extend beyond December 31, 2015 and collection will be enforced from January 1, 2016.

* Measures are in place through the Ministry of Social Development to exempt people who are unable to pay the tax, due to adverse financial circumstances.

* The rates could be phased in over a period of years. For example, the tax on residential property could be levied at the rate of one percent in year one (FY16), two percent in year two (FY17) and three percent in year three (FY18).

* Steps would be taken to amend certain legislative provisions including the determination of rates. It would be prudent, therefore, to revisit the legislation.

The latest statement, one sentence in newspaper report, advises, “Mechanisms for implementation of the property tax have been worked out, sources said, and this measure, which was announced in the previous Budget, would be implemented from January 1, 2017.” What mechanisms or is it another “scheme” to put citizens on hold until after the local government elections which must be held before year-end? And the explosion come on January 1, 2017? The Property Tax Act 2009 (Sections 5 to 30) is clear on the mechanisms for implementation of the tax.

For the benefit of the taxpayers, I hope the minister can shed some light on these matters when he presents his Budget on September 30.

Jim Jhinkoo via email