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Property Tax? OR Tax on Property?

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A paper as part of the JCC-hosted seminar on "Economic Revitalization through the Mobilisation of the Construction Sector" in Trinidad and Tobago.

Published in: Business
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Property Tax? OR Tax on Property?

  1. 1. PROPERTY TAX ? OR A TAX ON PROPERTY
  2. 2. PROPERTY TAX REVENUE EARNER OR MANAGEMENT TOOL
  3. 3. PROPERTY TAX SYSTEM OF RECORD OR A SYSTEM OF REVENUE COLLECTION
  4. 4. PROPERTY TAX A SYSTEM OF TAXATION OR A SYSTEM OF FINANCING
  5. 5. MUTUAL EXCLUSITIVITY NOTWITHSTANDING THE USE OF THE CONJUNCTIVE ‘OR’ ABOVE, NOTHING SAID SO FAR IS MEANT TO BE MUTUALLY EXCLUSIVE. WHAT IS INTENTED IS AN ATTEMPT TO WIDEN THE CONVERSATION ON PROPERTY TAXATION BEYOND THE COMMONLY HELD VIEW THAT A PROPERTY TAX SYSTEM IS ONE THAT SIMPLY COLLECTS REVENUE EITHER BY THE REVENUE DEPARTMENT FOR DEPOSIT INTO THE CONSOLIDATED FUND OR BY THE LOCAL CORPORATION TO FUND THEIR ANNUAL BUDGET IN PART. IF ALL THAT IS INTENDED IS TO COLLECT REVENUE TO FUND ANNUAL BUDGETS THEN THE ACCOMPANYING POWERPOINT PRESENTATION PRESENTED TO THE ISTT IN 2009 DEALS REASONABLY ADEQUATELY WITH THAT. HERE WE WILL LOOK AT THE OTHER ATTRIBUTES OF A PROPERLY CONSTRUCTED PROPERTY TAX SYSTEM.
  6. 6. PROPERTY TAX AND PLANNING PLANNING IN TRINIDAD & TOBAGO IS MARRED BY THE PREVALENCE OF PLANNING VIOLATIONS OCCURING THROUGHOUT THE COUNTRY. WHAT IMPACT WOULD A SERIES OF PENALTIES AND RELIEFS HAVE ON PLANNING COMPLIANCE OR LACK THEREOF. WHAT WOULD BE THE EFFECT ON DIRECTING DEVELOPMENT IN A CERTAIN MANNER OR TO A DESIRED LOCATION BY WAY OF TAX INCENTIVES BASED ON TAX RELIEFS OR VICE VERSA.
  7. 7. PROPERTY TAX AND LAND OWNERSHIP MANY PERSONS HAVE EXPRESED UNEASE IN THE MAINTENANCE OF THEIR OWNERSHIP OF LANDS IN THE ABSENCE OF THE EVIDENCE OF CONTINUED OWNERSHIP OF LANDS WHICH A RECEIPT OF PAYMENT OF TAXES GAVE PRIOR TO 2010. WHILE THE PAYMENT OF TAXES DID NOT IN ITSELF DEVOLVE TENURE ON THE PAYOR, IT SERVED NOTICE TO THE BONA FIDE OWNER THAT SOME OTHER PERSON WAS SEEKING TO ESTABLISH PRESCRIPTIVE RIGHTS TO THE LANDS THEY OWN.
  8. 8. PROPERTY TAX AND PUBLIC LAND MANAGEMENT AS INHERITORS OF THE FEUDAL SYSTEM OF LAND MANAGEMENT ONE NEEDS TO CLARIFY THE ROLE OF THE STATE IN THE MANAGEMENT OF LANDS WITHIN THE LAND MASS THAT IS TRINIDAD AND TOBAGO AND BEYOND IN THE CONTEXT OF THE MINERAL RESERVES WHICH IS THE LIFELINE OF OUR EXISTENCE. THE SYSTEM WE INHERITED MAKES THE STATE THE ULTIMATE OWNER OF ALL LANDS IN THE JURISDICTION, INCLUDING LAND ‘COVERED BY WATER’. THE MONACHIAL “WE” HAS BEEN REPLACED BY THE CONSTITUTIONAL “WE” BUT HAVE WE ACCEPTED THE RESPONSIBILITY THAT ACCOMPANIES THAT CHANGE. EVERY OWNER OF LAND IN THE JURISDICTION EXERCISES THAT ‘OWENERSHIP BY VIRTUE OF A DOCUMENT ISSUED BY THE STATE, BE IT A LAND GRANT; CERTIFICATE OF TITLE OR ‘OLDLAW’ DEED AND THE PRACTICE OF ‘ESCHEAT’ TO THE STATE STILL EXIST IN CURRENT LEGISLATION.
  9. 9. PROPERTY TAX AS A FINANCING MECHANISM PROPERTY TAX IS BY ITS VERY NATURE A WEALTH TAX. AS A GENERAL STATEMENT IT IS STILL ACCURATE TO ASSOCIATE AFFORDANCE WITH THE USE AND OCCUPATION OF LAND. IT IS THEREFORE A NATURAL CONSEQUENCE THAT SUCH A TAX WILL BE ‘AD VALOREM’ OR BASED ON THE VALUE OF THE PROPERTY TAXED. CONSIDERED WITH THE MANAGEMENT CONCEPT OF THE TAX, THE RELAVANCE WHETHER THE TAX IS A PAYMENT INTENDED TO DEFRAY THE OPERATION OF THE SYSTEM OR A CONTRIBUTOR TO THE GENERAL REVENUE. THIS QUESTION IS ANSWERED IN SOME JURISDICTIONS BY ADD-ONS TO THE BASIC TAX IN THE FORM OF PAYMENTS TO SPECIFIC SERVICES RENDERED BY THE STATE THROUGH ITS VARIOUS FORMS OF GOVERNMENT.
  10. 10. CONCLUSION LET US IN CONCLUSION ASSUME THAT THE PROPERTY RECORDS RESULTING FROM THEINTRODUCTION OF A PROPERTY TAX SYSTEM IS MORE IMPORTANT THAN THE REVENUE ACCRUEING FROM THE SYSTEM. SUCH A SYSTEM WILL HAVE AT ITS CORE, THE OBJECTIVE OF RECORDING IN SOME FORM EVERY TAXABLE PROPERTY UNIT IN THE JURISDICTION. SUCH A RECORD WOULD INCLUDE (BUT NOT LIMITED TO): • A DEFINITION OF THE TAXABLE UNIT; • THE PERSONS CLAIMING OWNERSHIP OF THE VAROUS INTERESTS THAT MAY EXIST IN THE UNIT; • THE OPTIMAL USE TO WHICH THE PROPERTY MAY BE PUT; • THE VALUES, BOTH CAPITAL AND RENTAL, OF THE UNIT; • THE PERSON RESPONSIBLE FOR THE PAYMENT OF THE TAX;
  11. 11. CONCLUSION WITH THIS REPOSITORY OF INFORMATION, DEALINGS IN LAND WILL BECOME A ROUTINE PROCESS. LAND ACQUISITION AND DISPOSAL PROCESSES INCLUDING NEGOTIATIONS WILL BE SIMPLIFIED AND THE LIMITED GUARANTEE AFFORDED HOLDERS OF CERTIFICATES OF TITLE WILL BE STRENGTHENED.
  12. 12. THANK YOU

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