The Tribune

By YOURI KEMP

Tribune Business Reporter

ykemp@tribunemedia.net

A Cabinet minister yesterday denied that the Government is “asking business persons to do the Department of Inland Revenue’s job” by providing the agency with their landlord’s property tax assessment number.’

Michael Halkitis, minister of economic affairs, told the Prime Minister’s Office weekly media briefing that the tax authority is instead merely seeking “an assist” that will benefit all Bahamians through ensuring property taxpayers are accurately billed and taxed.

By providing their landlord’s assessment number, or alternatively their name and the building’s location, Mr Halkitis said business tenants will aid the Department of Inland Revenue in ensuring the property is on the tax roll and appropriately taxed at commercial - rather than residential - rates. And it will also confirm whether companies are at the same address as reported previously for Business Licence purposes.

Companies have been asked to supply these landlord-related details for the first time as part of this year’s Business Licence renewal process. However, the Department of Inland Revenue has assured that renewals will not be held up as a result of this requirement, and Mr Halkitis yesterday reiterated the move is not intended to force tenants to pay real property tax arrears on behalf of delinquent landlords.

“Someone asked me: ‘OK, you’re asking business persons to do the job of Inland Revenue’,” the minister recalled. “We’re asking for an assist because it benefits us all. This will essentially benefit us all as it will increase the number of properties on the tax roll. The more people get on the roll, we can begin to look at reducing rates.”

The Government is seeking to collect 75 percent of the real property tax it bills on an annual basis, increasing this from the present 40 percent in a bid to increase revenues, improve compliance and ensure that all taxpayers pay their fair share.

“What we have to do is try and get more properties on rolls. Unfortunately, the rolls are still not complete,” Mr Halkitis said in reference to the number of properties registered to pay real property tax. Besides asking businesses to provide their landlord’s real property tax assessment number, Mr Halkitis said the Department of Inland Revenue also plans to increase staff in the Out Islands.

“We also have plans to increase the number of individuals we have, particularly in the Family Islands, so that we can close any gaps in terms of second homeowners. We’ll be rapidly and aggressively pursuing that in this upcoming year,” the minister added.

“We have initiated with the clearing banks the system where they are ensuring that the property taxes are paid on properties under mortgage with them, and so that is being ramped up. That is a process, every month, as time goes on, the amount of mortgages covered is increasing. That is useful for individuals because we’ve have had instances where individuals have not paid for the life of their of the property.”

Mr Halkitis said he had seen “recent cases” where property owners have died, leaving real estate assets for their children, only for the latter to discover “huge outstanding bills” for real property tax that have not been paid. Similar-sized bills have also delayed property sales and prevented owners who have paid off their mortgages from becoming “home free”.

The Government, in the past, has typically collected large sums of real property tax arrears in such circumstances. However, Mr Halkitis said taxpayers will likely be better off if real property tax payments are included with their mortgage payment and collected by the lender, as this will smooth out the sums involved.

“So we believe that if it’s paid, even if it’s blended into the payment, so there’s a small amount, or if the bank just certifies that it has been paid, that assists us a lot,” he added.