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Increased property tax ‘fair’ and ‘reasonable’ — PM

Prime Minister and Minister of Finance Dr. Ralph Gonsalves (File photo).

KINGSTOWN, St. Vincent – The 15 per cent increase in property tax announced earlier this month is both fair and reasonable, says Prime Minister Dr. Ralph Gonsalves.

Owners of properties with a market value of more than EC$25,000 will this year begin paying 0.08 per cent of the value of the property to the state, annually.

This will see property owners paying an average of 15 per cent more even as some payment rise by 25 per cent and some existing taxpayers no longer paying.

Gonsalves, in defending the new system, said at a press conference on Wednesday that since coming to office in 2001, his government has reduced income tax rates, at the highest levels, from 40 per cent to 32.5 per cent.

He further said that his Unity Labour Party administration has increased the annual income exemption threshold from the first EC$11,000 to the first EC$20,000.

“So their actual take home pay has increased as a consequence of the deductions for income earners in the country, which has added to the pay packets,” said Gonsalves, who is also Minister of Finance.

He further said that under the previous annual rental value (ARV) system, only 29,000 properties were registered for taxation.

However, the new market value system captures 40,000 properties plus an additional 15,000 structures.

“Why should you be paying taxes and your neighbour, who has built a new house, and who wasn’t on the property tax roll, [not] pay their taxes. Don’t you want everybody to be paying? So that’s the fairness point,” Gonsalves said.

All modern tax systems have moved from ARV to market value, Gonsalves said, adding that using the market value of properties to levy taxes is more objective.

He said that the data analysis that informed the new tax rate found that 5 per cent of the ARV equals 0.07 per cent of the market value and his government set the property tax at 0.08 per cent of market value per annum.

He, however, said that the market value of some properties is so high that 0.08 per cent of it would amount to much more than the original ARV taxation payment.

“Well, it can be unfair to someone, terribly; so you put a cap. That why you say on an average, the increase will be about 15 per cent but you put a cap there for 25 per cent.

“I think that those are reasonable propositions given the historically low rate of property tax in the country and the low level of compliance,” Gonsalves said, adding that the exemptions “add to the reasonableness”.

He further said that donors in Europe, where property taxes are very high, might be wont to think that increasing property tax locally is one way for this country to help itself.

“I raise these as practical matters,” Gonsalves said.

“I mean I have a responsibility to govern, you know. When you give me quote-on-quote power, or authority, it comes with a responsibility to govern. I can’t abandon the responsibility.

“The oldest profession in the world, I have been advised, has a lot of power over men, but they carry no responsibility. You would not wish me to conduct myself akin to the oldest profession in the world. No! So I believe that when people look at it, … it is reasonable,” Gonsalves said.

He said that exempting properties that are valued less than EC$25,000 would cost the state EC$900,000 per year and that his advisors did not support the exemptions.

“But this is a government of the poor and working people and the good Lord blesses he who considers the poor and He protects us who so act against all sorts of adversities and helps us in areas in which you can’t begin to contemplate,” Gonsalves said.

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Discussion

6 thoughts on “Increased property tax ‘fair’ and ‘reasonable’ — PM

  1. Will the ULP Fat Cats get their property valued properly?

    Gonsalves and the Francis boy will be paying plenty.

    Who built your latest house Francis???????????????????????????

    Posted by Peter | January 22, 2012, 19:08
  2. home owners are loosing value on their homes? ( o _ 0 ) That’s not fair. How does the government figure this?! Once again, the government can bail out fat cat bank and automotive CEO’s (with tax payers money) while Americans are not only loosing on the value of their homes, they’re actually loosing their homes. ( o _ 0 )

    Posted by Newburyport real estate | January 22, 2012, 19:42
  3. The ” Bull -too- tooo” artist at it again. The question is this: Are we expected to pay more for house tax or not? That’s it? Anything else is just ‘mumbo jumbo’. If we are expected to pay more for house tax then it is unreasonable, since our salary remain the same. Why does PM Gonsloves continue to believe that he change our reality with “Flim-flam tactics”. This is getting very boring. Just tell us if we have to pay more or not. Frankly, I am getting tired of PM Gonsolve’s “Bull too-too.ery” … suck teeth.

    Posted by Olbap | January 23, 2012, 11:30
  4. But he said its fair, is that the truth or a lie? What do you all think?

    Posted by Peter | January 23, 2012, 11:33
  5. You guys always saying that the country has no money. When the Comrade begs you criticize him, he raises tax and give special measures to poor people you criticize. WHERE THE HELL DO YOU GUYS WANT THE COUNTRY TO GET MONEY FROM????? Well I remembered when I used to pay $40. per annum for house tax, the NDP increased it to $190. or 375%. YES, THREE HUNDRED AND SEVENTY-FIVE PERCENT INCREASE. I appealed, to date not a single soul came to my assistance. This was when I was paying a mortgage of $880. per month!!!

    Posted by no-nonsense | January 23, 2012, 22:57
    • No-NONSENSE have you ever heard to the productive sector? Research that.

      Posted by Olbap | January 24, 2012, 11:43

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