Tax-collection process needs improvement
DESCRIBING PROPERTY tax compliance rates as a national disgrace, the Private Sector Working Group (PSWG) on tax reform has told a parliamentary committee that urgent steps must be taken to improve the level of collection.
It is estimated that property tax compliance has fallen from 70 per cent in 2003 to 50 per cent in 2010.
Joseph M. Matalon, spokesperson for the PSWG, said the country has been losing a lot of money as a result of non-compliance. He said one reason for the low collection of property tax is a lack of regular updates to the valuation rolls.
"The fact that the last time the valuation roll was completed was in 2002, also serves to depreciate the value of property tax revenues that we are generating, even at full compliance," Matalon said.
"The property tax has moved over the past seven years from 0.35 per cent of GDP to about 0.1 per cent of GDP," he added.
As part of a reform, the PSWG has suggested that the regular intervals that are enshrined in law for that valuation to take place - which is five years - be observed.
"We also believe that in the inter-valuation period there ought to be some level of annual indexation of the property value by reference to some price index of properties that could be developed by the NLA (National Land Agency)," Matalon said.
Agriculture land policy
In the meantime, committee member Horace Dalley has said Government should revisit its policy on agriculture land being exempt from property tax.
"Those owners of agriculture land with whom I had to interact in 2001-2002 when I was minister of land and environment, when the last property tax was done, have to understand that they can't sit down on thousands of acres of land, doing nothing and don't want to pay anything," Dalley said.
Matalon expressed a similar view to that of Dalley. "A case could be made for government re-looking at those exemptions and relief and just satisfying yourself that they are meeting the objectives you set out to achieve when those objectives were put in place," Matalon said.