The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A leading accountant yesterday said the Government should be “collecting a lot more revenue from real property tax”, praising it for its plans to combat this but also noting that its incentive programme could “have been more generous” towards current payers.

Simon Townend, a Bahamas-based KPMG partner and managing director of its corporate finance arm in the Caribbean, echoed comments made by Morley Realty realtor Chris Armaly, adding that the Government’s amnesty/incentive programme needed to be backed by 
“proper enforcement”.

“The initiative to collect on real property tax is obviously a good one, but it could have been more generous for those people who have already paid up to-date,” Mr Townend told Tribune Business.

“It’s almost like those who haven’t paid are being rewarded with significant discounts as opposed to those people who have paid, but apart from that I would hope this initiative brings in more decent revenue for the Government.

“Incentives and amnesties are always good, but it needs to be followed through with proper enforcement. People are given a chance to pay, but if they don’t the Government needs to take a hard look at it.”

Unveiling a four-pronged real property tax amnesty programme, which will take effect from March 1, 2013, Prime Minister Perry Christie in his Mid-Year Budget said it was designed to “incentivise increased payments”.

The four strands are:

• To encourage self-registration of residential properties valued at more than the $250,000 exemption threshold, and commercial properties that had never received a real property tax bill, those who registered with the Chief Valuation Officer by June 30,2013, will not be charged any back taxes.
• To ensure registered property owners who were in arrears became current, the Government will waive 50 per cent of the sum owed - assessment and surcharges - by those who are three years or less behind if payment is made by end-June 2013.
• For those who are more than three years in arrears on their real property tax payments, the Government waive 100 per cent of the penalty charge only if payment is made by December 31, 2013.
• Apart from the 5 per cent rebate for residential homeowners who are current, the Government is also moving to tackle complaints about people receiving increased billings of between 200-500 per cent.
• Moving to make the process “more client focused”, the Prime Minister said all 15 per cent year-over-year increases in residential real property tax bills would be “automatically reviewed”.
• The same also applies to residential real property tax assessments where the average yearly increase between revaluations exceeds 10 per cent.

The Prime Minister said this was all intended to “clean up the real property tax register and modernise the administrative infrastructure”, so that the Government could “take a firmer stance in enforcing compliance”.

Real property tax is a key target for the Government, which is hoping to increase revenues generated from this source by 1 percentage point of GDP - some $80 million - by the 2016-2017 fiscal year.

However, Mr Townend said real property tax payers who had become current within the last several months, would effectively lose out, as they will now miss out on the 50 per cent discount given to those less than three years in arrears.

Noting that there were numerous homes in the Bahamas not being assessed for real property tax on an annual basis, Mr Townend said there was technology the Government could use - especially that which was satellite-based - to map the entire country and capture all properties.

“Nassau is 25x6, so it shouldn’t be too difficult to map the island using technology to capture all the homes not assessed,” Mr Townend said. “It takes some time, but the cost of doing it should be significantly less versus the potential receipts.

“I think it’s very positive moving forward, because they should be a lot more revenue coming from real property tax.”