Friday, September 10 2010

The Property Tax Bill 2009 was arguably the last callous act of an administration indifferent toward a people whose funds it had spent without discrimination and who it then expected to foot the cost of its wild spending spree.

Thankfully, Finance Minister Winston Dookeran laid it finally to rest in his budget presentation on Wednesday.

Come hell or high water, the Patrick Manning PNM would have their way and raise property taxes. As 2009 closed, it forced the Tax Bill through the legislature with its Minister in the Ministry of Finance Mariano Browne once again attempting to allay panic over the proposed new harsh tax structure.

“I want to assure the population that the purpose of this legislation is not to cause stress, difficulty, or fear,” he declared as he closed debate on the Bill in the Senate on December 30. The dreaded legislation was then quickly dispatched the next day to President George Maxwell Richards for his assent.

No one was convinced by Browne’s assurances. What else but stress could an enormous increase in annual property tax cause a population already under economic duress from inflation? Further, tax bills due to arrive in March this year never did. The entire plan was a political circus.

It seemed none in the PNM had learned from the mistake of Margaret Thatcher whose 1990 poll tax — which incurred the wrath of thousands of Britons and stirred mass riots — contributed to her downfall, a mere six months later. The proposed revised property taxes of Patrick Manning became one of the final nails to seal the PNM political coffin. Five months later the people it had sought to levy, demanded their pound of political flesh.

We must thus now thank the People’s Partnership for keeping its campaign promise to repeal the unconscionably unfair Property Tax Act and to have this measure included in this year’s Finance Bill. Of more relief to the homeowner must be the news that TT is going to return to the previous system of Land and Building taxes, which will now be reduced. Additionally, there will be a moratorium on these taxes for the year 2010, which will allow the system to return to normal functioning and this is only fair to taxpayers given the anguish caused by the hasty passage and implementation of the 2009 tax bill.

We can expect this tax drop to have a ripple effect, which is what Prime Minister Kamla Persad-Bissessar seemed to be hinting when she revealed the news. She said the old rates were higher than they should have been because the PNM had overvalued property prices. Reduction of the land taxes to rates even lower than in 2009 must be this Government’s signal that it thinks the price of land too high now and intends to bring it down or keep it under control, as it fights inflation on other fronts. Also, the PP wants to build 6000 houses, which will prove a costly exercise when millions have to be spent on fixing “new” houses built by the last regime, and when construction costs have sharply risen.

The Government is being practical. While worldwide property values were plunging in the economic crisis, in Trinidad and Tobago they were rising, grossly inflated by the massive, largely corrupt construction projects of the PNM. No one could afford to buy or build by 2009. The cost of land and property needs to readjust to realistic values if people are to afford housing, their own or that provided by the State. The over expanded and overrated construction sector will have to resume its old shape.

The PP is setting the tone, sending a message: land and property prices must drop to reasonable values and the people must stop being made to pay for the excesses of a runaway administration. Unfortunately though it is often exactly the people who pay the toll when governments lose control. We again thank the PP for lifting this unnecessary and hardhearted property tax burden, for repealing the PNM’s ultimate act of legislative, political and economic oppression.