Render unto Caesar

In the time of Jesus, there was even more reasons to object to taxation since taxes were levied by the occupying Romans. That is why tax collectors were reviled and Jesus’ association with them brought him into disrepute with some people.

Monarchs taxed whatever was produced, imported or exported. Later on, taxation of land became possible once property rights on land were settled.

Income taxation was introduced in England in fits and started since the 19th century and was not institutionalised until the early 20th century, when, including company tax, it became the main form of taxation. Soon taxes on expenditure — sales taxes, purchase taxes, and Value Added Tax (VAT) were introduced. Governments today therefore have various methods of taxation. Citizens usually have two big concerns with taxes. The first is: are they fair and equitable? Generally, taxes are considered fair and equitable if those who should pay do pay; and if those who can afford to pay more are made to bear a greater burden than those who are less able.

The second concern is: am I getting benefit from paying my fair share of taxes? Tax revenues are spent on public goods and services — roads, airports, schools, hospitals, police, fire services, etc, which each of us consumes to varying degrees.

In addition, some of our taxes are redistributed to those members of our society who are less able to care for themselves. What vexes citizens, and rightly so, is the wastage of public money, or corruption, which puts public money illegally into private hands.

In Trinidad and Tobago, while there was legislation providing for land taxes in the 19th century, the Land and Building Taxes Ordinance was initially legislated in 1920 and operated until 2009. Port of Spain and San Fernando had separate property tax schemes until 2009.

The basis of land and buildings taxes since 1920 has always been the “annual rental value” and remains so under the new Property Tax Act. Annual rental value seems odd where the property is owner- occupied and is not or has never been rented. But even where a house does not generate income, in cash through rental, it does produce a “notional income” for the owners and occupants. This notional income is measured by the estimated rental value and is assumed to bear some relation to the value of the property. Wealthier people in better houses will therefore pay a higher property tax than persons in less well-off neighbourhoods. This is fair. Finally, there is no provision in our laws for tax revenues from particular sources to be earmarked for particular uses. All revenue goes to the Consolidated Fund and, except for Tobago, it is at the discretion of Central Government when and how much goes back to local government. The principle of subsidiarity suggests that where the local authorities are fully competent, property taxes collected in local areas should be retained in and managed by the local authorities for the benefit of residents. However, even this principle would need to take account of disparities in living standards in different parts of the country, which the Central Government should try to correct over time through redistribution.

Payment of taxes is a social responsibility and even if we do not like Caesar, we should render to Caesar what is due to him.