The Government yesterday announced reductions of 0.5 to 0.9 per cent in property tax rates, responding to public pressure that mushroomed after it announced the new rates several weeks ago.
However, the cuts, from the previously proposed rates of 0.8 to 1.3 per cent, will leave the Administration with a $2.1 billion hole to fill.
Amidst shouts of “Roll it back!” from Opposition legislators during a rowdy sitting of the House of Representatives, Finance Minister Audley Shaw said the adjustment was a “big reduction” from the tax rates announced recently, and that the revised measure is expected to yield $6.5 billion in revenue to help fill the $13.5-billion hole in the national budget, instead of the $8.5 billion that was first projected from the previously announced rates. He gave no indication as to how the new $2.1-billion gap will be made up.
The finance minister said the new tax rate would either reduce or cause no change to the property tax rates of 448,860 of the 776,487 properties on roll. “This is a big increase from the 35.1 per cent who would have benefited based on the previously announced rates,” Shaw said.
He explained that with the new rates the average increase for residential properties will be 10 per cent, down from a 60 per cent average increase. Those who own farm lands will pay 40 per cent more, which the minister said was down from 93 per cent.
But owners of large properties, such as hotels and commercial entities, who have been waiting with bated breath on the Government’s announcement, will still face massive increases. Those with properties valued over $20 million will pay increases ranging from an average of 201 per cent to 604 per cent.
The finance minister pointed out that of the categories of properties that would be affected by large increases, 2,062 were residential. “We expect that some property owners will still see large increases. It’s a difficult trade-off. We have to be honest with the Jamaican people,” he stated.
People who have already made payments as of April 1, based on the previously proposed rates, can get a refund, or can have those funds credited to their 2018/19 property tax bills.
However, Opposition MPs made clear their dissatisfaction with the adjustments. Manchester Central representative Peter Bunting, who spoke on behalf of the Opposition, said the Government’s entire tax package had been “shaped in sin and born in iniquity”, and was occasioned by the need to fill a political promise of a $1.5-million personal income tax break.
He argued that if properly planned, property tax reform can be successful and put forward the Opposition’s proposal to suspend implementation of the new rates by a month to allow stakeholders to digest the implications of the new figures, and facilitate consultation.
Bunting further called for immediate reconvening of the Parliamentary committee on proposed tax measures. “Let us present the documentation, the tax incidents studies… we need to understand where the tax burden will fall – we can hear from the farmers, the hoteliers, the pensioners,” he said.
Meanwhile, Shaw promised a slew of relief mechanisms that, he said, are being put in place to facilitate complaints, appeals, and payment arrangements. This includes the reconvening of special relief committees which have not been functioning properly, resulting in years of delays for property owners seeking relief from taxes. He said all committees are to be reactivated immediately, “and held accountable for their timely review of applicants”.
Landowners can also file an objection with the commissioner of land valuations if they feel their valuation is too high, or apply for statutory relief in cases where the area surrounding a property may have significantly developed, resulting in escalated increases in valuation, but the landowner has not changed the use of his/her own property. Shaw said farmers can also apply to the land relief board for the value of their land to be reduced by as much as half for tax purposes.
Special discretionary relief of up to 100 per cent is also being offered to landowners experiencing hardship, “if the circumstances warrant”, he said. Pensioners, the elderly, indigent, persons with disabilities are among those category of persons who can benefit.
