BUSINESS leaders are expressing concerns over the implementation of the property tax, at this time.
On Friday, Trinidad and Tobago's leading chamber of commerce, the TT Chamber of Industry and Commerce, questioned the timing of the implementation especially as "consumers have been hit by increases in costs and to institute an additional cost on homeowners would make it difficult for them to meet their existing commitments."
The chamber said it understood the need to implement property tax but noted, with concern, the financial impact it may have on people "at this time."
"We are aware that the revenue generated from the property tax is a necessity to pay for services and operations of the local government bodies and hope that it is executed in an equitable manner based on the criteria laid out for charges to be applied to properties," the statement said.
"The timing, however, is an issue as consumers have been hit by increases in costs and to institute an additional cost on homeowners would make it difficult for them to meet their existing commitments."
Agreeing with the TT Chamber's concerns over timing of the implementation while asking for more time was president of the Greater San Fernando Chamber of Commerce, Kiran Singh.
On Sunday, Singh said while the business community understood it must pay property tax, which is a worldwide fiscal measure, he called for an extension of time as well as reduced taxes.
"We were accustomed to paying the land and building tax before 2010. The property tax is much higher depending on the category of ownership people fall under.
"We understand we have to share in the burden of tax collection and revenue generation," Singh told Newsday.
However, he said, "Having just come out of the pandemic, we are now starting to emerge back into some sort of semblance of business operation.
"We need time to catch ourselves to reemploy the people that we would have furloughed."
The business community, Singh said, remained a "significant employer" of workers after the Government.
"That is a responsibility we have to accept," Singh added.
On the increasing cost of living, Singh cited the Regulated Industries Commission's price-increase proposals for the state-owned utility company — TT Electricity Commission.
Singh said, "The fuel prices have increased a few times since before the pandemic. We also have rising food inflation. We have not had the drop in food prices that they predicted would happen in the middle of the year.
"We are asking for additional time. We are also asking about failure to pay. What is the penalty?"
Last week, when Finance Minister Colm Imbert piloted the Valuation of Land (Amendment) Bill, 2023, in the House of Representatives, he said 232,000 residential properties have had their values evaluated to be included in the land valuation roll, which will serve as the foundation for the property tax.
The bill separates the country's properties into four classes— residential, commercial, industrial and agricultural.
The property tax is three per cent of a property's rental value.
Singh also raised concerns about the manufacturing sector, adding that plants and pieces of machinery are set to be taxed.
"These items tend to attract a higher rate of depreciation than other assets on the balance sheet of a business. It would discourage further investment in the manufacturing industry. This will be disincentive for them to get into further manufacturing processes," Singh said.
"There is still a lot of information that we do not have like when the Government intends to start it. Is it going to start with residential and then go to commercial? Is it going to be for all sectors of the economy in one sweep or is it via phases?"
Singh said it has been a "very tumultuous time for businesses especially those in the MSME (micro, small and medium-sized enterprises) sector which we by and large represent."
In its statement on Friday, the TT Chamber spoke of the possible impacts to the manufacturing sector, expressing the hope it did not deter business owners from maintaining their companies' plant and machinery as well as updating their infrastructure to industry-related best practices.
"We have in the past called for a revision of the six per cent tax on industrial properties to apply strictly to physical property and not install cost of plant, machinery, and equipment inside or outside," the statement said.
"We also maintain the view that introducing a top-line tax on businesses' revenues may be a disincentive for further investment in a time when the emphasis is to create an enabling environment for business growth and so have a ripple effect of less taxable opportunities for Government."
The chamber also said it looked forward to working with the relevant stakeholders and the Finance Ministry to find a solution.
Other business owners also told Newsday that while the appreciated the need for the tax, they, too, had concerns.
They had questions on where the revenue from the tax will be kept, suggesting it does not go to the Consolidated Fund. They also questioned if the tax will be applied retroactively, advising that this should be avoided since the private sector was not completely over the financial stress experienced during the pandemic.