The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

THE Government is looking to increase property tax revenues to 2 per cent of gross domestic product (GDP) by 2016/2017, the minister of state for finance sad yesterday.

Calling the Government’s target “ambitious but achievable”, Michael Halkitis told Parliament that specific reforms to the real property tax (RPT) system have been developed that could double revenues over the next five years.

He added that the Government was committed to presenting to Parliament in the next Budget a full program of reform for the real property.

During his contribution to the Mid-Year Budget debate, Mr Halkitis said the current system suffers from many “critical structural defects”.

He added: “As a result, revenues generated by the system fall significantly short of the amounts that should rightfully be collected. Specific reforms have been developed which could readily double property tax revenues over the next five years.

“The very first step in the reform process has been the identification of the major gaps in real property tax performance relative to desirable norms.

“There are grave deficiencies in the property tax coverage ratio, the billing ratio and the collection ratio. The property tax compliance rate is low, at around 50 per cent, as a result of a number of factors including unwillingness to pay, poor coverage, as well as other organisational deficiencies.”

Mr Halkitis continued: “We are committed to presenting to Parliament in the next Budget a full programme of reform to the system. A feature of this reform programme will be new, modern legislation, improved business practices, as well as a more client-focused organisation.

“Our target, both ambitious but achievable, is to increase property tax revenue to 2 per cent of GDP by 2016/2017, from the current 1 per cent.”

Last week, Prime Minister Perry Christie announced an amnesty programme which began on March 1, as an interim measure which he said would incentivise increased real property tax payments.

Mr Christie explained that there will be four components to the programme. To encourage, self-registration, owners of residential properties above the $250,000 exception threshold, and owners of commercial properties, who have never received a property tax bill will be encouraged to register their properties with the Chief Validation Officer by June 30, 2013.

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.