Dislike of tax is universal

Property or estate taxes tend often to be levied at the point of sale, but the application of the tax in Trinidad and Tobago, though based on sale-price evaluation, will be levied on all properties. Commercial and residential.

It will initially be self-evaluation, then certification.

Homeowners may like it less than landlords who don’t yet have sitting tenants. Landlords everywhere had been brought back down to earth with the realisation that the demand pool had shrunk. At the high end, owners of plush apartments who used to easily get fiveyear lease agreements at US$4,000 a month plus with big foreign firms have had to readjust their sights. It’s a tenant’s market. Has been for a while now.

There has been strong reaction to the tax.

How it plays out will tell us a lot about the state of the market. If landlords are generally unable to pass it onto tenants in a market that favours the latter, then that’ll be a clear sign that the housing recovery is lagging. But that depends on how deep into a contract a tenant is, and her willingness to negotiate and search for better deals. With the market the way it is now, the person the tax favours the least is the homeowner, whether s/he’s a landlord or not.

Homeowners, a new tax bill. Landlords, having to raise the rent.

Taxation isn’t popular. It’s always irks a bit when the TT$200 restaurant meal that you mentally calculated at the outset doesn’t look anything like the bill total after two sets of taxes have been added. And yet, attitudes to taxation vary, often in the same market. During the US elections, some rich people of a certain political persuasion said they’d be willing to pay more. Others, most notably the man elected president, said openly that they seek actively to pay as little as they can.

ACCA conducted a study of tax in the 20 richest countries in the world, the G20 group.

One of the main takeaways is that on tax matters, two-thirds of respondents distrusted of politicians. What do you think the figure is for politicians in TT? Ping a tweet to my twitter account below. Fifty-seven percent trust or highly trust professional accountants for information on the tax system, followed by professional tax lawyers (49%) and nongovernmental organisations (35%). The public doesn’t trust the media either -- 41% said distrust or highly distrust, and interestingly 38% distrusted business leaders.

However, the findings aren’t uniform across G20 – I’d have been shocked if that was the case – and accountants don’t escape completely. While 58% of people in G20 countries believe the work of professional accountants is contributing to more efficient tax systems, France, Germany and Russia, do not have as much trust and belief in professional accountants as the rest of G20.

One interesting thing about the property tax in TT is that the dislike has been equal opportunity. Views on tax tend to cleave along the lines of who should pay more, or as is sometimes said in political debate on taxes, “soaking the rich.” Most G20 respondents do not believe that the rich are paying their fair share, with 52% answering agree or strongly agree, with the question of whether high-income earners are paying a reasonable amount of tax.

People tended to more sympathetic towards the tax burdens of the rich in Argentina, China, France, Indonesia, Korea, Mexico, Saudi Arabia, and Turkey. In Australia, Canada, Italy, the United States, and United Kingdom, people tend to think high income earners and multinational companies don’t get taxed enough. One interesting takeaway was that respondents were generally fine with companies employing tax shelters, but not so understanding of individuals doing it. They were 15% more likely to think it is appropriate or highly appropriate for multinational companies to minimise taxes, than they did for average or low income earning individuals to employ tax minimisation.

In Australia, Canada, Germany, Japan, the United States and United Kingdom, people view tax minimisation as something that is more appropriate for average or low income earners and local companies to do, but less so for high income earners and multinational companies. Italians and South Koreans tended to really dislike any form of tax minimisation.

The study is based on an online survey of more than 7,600 people across G20 countries.

It was a deep pool. Respondents include approximately 400 people from each G20 country.

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