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Relief for owners:
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■ Ria Taitt
Political Editor
RELIEF is in sight in terms of payment arrangements for payers of property tax.
This was confirmed by Minister of Finance Colm Imbert in the Senate yesterday.
He also clarified that those who have not received their notice of assessment for property tax from the Board of Inland Revenue will not face penalties and interest for failure to pay.
He said unless the property owner receives a notice of assessment calculated at the reduced rate of 2% (of annual rental value), he/she is not required to pay.
'The rate of property tax on residential properties was reduced to 2%. So if someone has received an assessment using the old rate of 3% (of annual rental value), it is invalid,' Imbert said, as he responded to a question from Independent Senator Sunity Maharaj.
Property owners have been facing long lines at the nine payment centres across the country as the September 30 deadline approaches.
Responding to a question from Independent Senator Paul Richards on this issue, Imbert said there would be no additional locations at which people can pay property taxes before September 30.
However, efforts were being made to expand the capacity of existing locations, he said.
With respect to additional payment options, he said it was a very complex matter made even more complicated by the situation involving the Auditor General.
'Unlike your water bill or your electricity bill, which we're all accustomed to paying online, when the payment is remitted to the relevant statutory authority, or even in case of a telephone bill, such as Digicel or TSTT, the financial institution deducts an appropriate percentage as a service charge for facilitating the transaction,' he said.
Saying property tax was revenue, Imbert said: 'Unfortunately, under the Audit and Exchequer Act, revenue must be sent in and there can be no deduction of a service charge.
'So what we have been looking at with respect to the commercial banks is a system where they will act as a collector of revenue, so that someone would make an online payment, the banks will collect those payments of property tax...identify who paid for what, when, and so on, and then remit the amount paid in full to the treasury to go into the Consolidated Fund for it to be recorded as revenue.
'The banks would then send a bill to the Ministry of Finance for the service charge. So that the payment of revenue must always be 100%, there can be no reduction from it. That is complication number one.
'Complication number two is that systems must be in place to ensure that the payment of the property tax is properly recorded as revenue. You will remember that the source of the problemthe impasse, as it is called by the media-between the officials in the Ministry of Finance and it now appears also the Central Bank, and the Auditor General is a question of accurate recording of revenue.
'So what I would not want to happen is a situation where people make their property tax payments online and it is not properly recorded as revenue in the Consolidated Fund. And then we will get another report from the Auditor General and that will start another set of confusion. But we are very close to a solution with respect to this matter. I expect it to be imminent.'
Independent Senator Dr Paul Richards asked whether, given the resolution being worked on by the ministry through potentially the commercial banks, either in person or online, whether Imbert can confirm the online process and a timeline for it.
'The process that we are working on will be an online process. It'll be virtually identical to the online payment...of your utility bills so that those persons who have the facility to use their bank account to make a bank transfer, as is now done with WASA and T&TEC and so on, will be able to do that. That's a process. I would not want to give a precise time at this point in time.
'Before I came here, I had a discussion with the technocrats who are working on the solution to make sure it's properly recorded. What, there are two things that must happen-when the person pays the tax, they must get a receipt from the Board of Inland Revenue to confirm that they have paid the tax because if they don't get that, then you can end in an argument and then there may be even more confusion with respect to penalties and interest. So that's issue number one that must be dealt with.
'Issue number two is a proper recording of the revenue in the Consolidated Fund. But we are almost at the end of a solution that we deal with both (matters) so that when you pay online, you will automatically, within a minute or two, get a receipt confirming that you've paid this tax, which you can then present to the Inland Revenue if there's a query.
'And also it'll be properly recorded as revenue. So it's imminent. We are also working on additional solutions using credit cards and debit cards,' Imbert said.
Asked by Richards whether an extension was being considered post-September 30, given that he acknowledged that the systems were not in place for mass processing of the property tax payments, Imbert pointed out that Opposition Senator Wade Mark had filed an urgent question asking this information.
But the time for urgent questions expired before Imbert got the chance to answer Mark's question about a possible extension.
Imbert: Don't pay if you haven't received an assessment Maharaj asked whether in light of taxpayer confusion surrounding the payment of property tax, whether Imbert could indicate if the September 30 deadline applied to homeowners who have not yet received the notice of property tax assessment.
Imbert said he had sought legal opinion in the short time available to him to prepare for the urgent question and had received an opinion, emanating from the BIR and the Treasury Solicitor's department in his ministry, that if the failure to pay the tax did not result from the default of the taxpayer, then the person is not liable to penalties and interest.
'The default of the taxpayer I'm talking about here is that if the Board of Inland Revenue has been unable to deliver the tax assessment notice to the taxpayer, then the taxpayer is not at fault.
'So you have not received a tax assessment notice from the Board of Revenue. The legal opinion is that you're not at fault and you will not be subject to any penalties and interest. You have to receive it first.
'And with respect to the ones (property owners) who got 3%... there weren't too many of those... the ones that got (notices of assessment) at the 3% rate, they are not valid.
'So the taxpayers have to get a tax assessment based on a 2% rate of property tax. And if they don't get it, then they are not in default and they will not be subject to penalties and interest,' Imbertstated. See Page 8
'CLOSE TO SOLUTION': Finance Minister Colm Imbert moves the second reading of The Miscellaneous Provisions (Global Forum) Bill, 2024, yesterday in the Senate.
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