RECENT objections by the business community, the paving of the way this week for the holding of local government elections, and a lingering court action that could affect the implementation of the Revenue Authority have all thrown into question the Government’s longstanding plan to proceed with the resumption of property tax.
But while this issue is set to become a key election one and while it remains subject, as such, to political considerations, we feel that, after more than a decade of discussion, it is time for the debate to be better informed by facts and figures.
Up until now, the Government has shown no inclination to hold its hand on this measure, proceeding with land-valuation legislation in Parliament and sticking with its position that it is in favour of local government reform that could see the property tax fund municipal and borough bodies.
But given that election processes are in the air, officials may do well to put a break on things and to allow any upcoming poll to be an effective referendum on the issue of the timing of the implementation of the tax.
As such, campaigning, once the election bell is rung, needs to be informed by the most reliable and up-to-date data, not just generalisations and political assumptions divorced from economic reality.
We know from government officials that there are about 600,000 properties in the country, with the vast majority, (about 400,000) being residential. The remaining properties are commercial (49,000), industrial (3,000) and agricultural.
While 232,000 residential properties have been earmarked as ready for the roll, we’ve not heard enough about the proportions of each category in terms of value to get a clearer sense of how, in real terms, this tax will be shouldered between homeowners and businesses.
Opposition Senator Damian Lyder on Sunday said implementing the property tax will increase the cost of business and will worsen the ease of doing business. Such things may be self-evident, but it’s not good enough to simply say them without a clear idea of the exact costs involved.
We need to hear, preferably from central statistical bodies and economic regulators like the Central Bank, what the envisioned inflationary impact will be on businesses, homeowners and consumers, who will also undoubtedly bear some of the costs if expenditure is, as it always is, passed on.
The Government has boasted the economy has returned to pre-2020 levels in terms of certain economic indicators. But how will property tax affect economic activity? Could it dampen the prospect for growth and by how much?
All of this should be set against the expected revenue windfall, projections of which need to be detailed and disaggregated.
The State still has a lot of consultation to do in terms of the timeline of implementation as well as proposals for the tax to be staggered and for plant and equipment to be removed from the equation. Only data will help inform such decisions, even if the population votes to retain the tax.