Finance Minister Larry Howai has said clearly that Property Tax in a revised form, will be introduced in the budget on September 9, 2013.He said: "We are looking at the Land and Building Taxes and we are looking at putting the regime in place there." However, he said he was looking at a "new system" because "The old system had many, many problems and it made sense to move away from that old system, but we are looking to implement it on a phased basis going forward."
There was widespread anger and opposition to plans by the government of former Prime Minister Patrick Manning to introduce a revised Property Tax which would have seen the "peppercorn" rates paid by property owners skyrocket into the thousands.The move spawned a campaign "Axe The Tax" co-ordinated and led by the Congress of the People (COP), which is now one of the parties making up the coalition government. That campaign caught the imagination of the population, attracting thousands to its rallies.
Analysts believe the government's plan is fraught with political danger.Political scientist, Derek Ramsamooj said the government must carefully review how it reintroduces the concept of property taxation. "In most developing countries, property tax is considered part of the revenue structure of governments.
Within the context of our economic realities it would become significantly important in the short to medium term that the government finds additional sources of revenue, one of which should be the property tax."
He acknowledged that there might be political risks to the government in bringing back the tax which some of its members had campaigned vocally against, but said, "It was indeed simple to develop an 'Axe The Tax campaign' while in Opposition, but quite a different matter when you are part of a government required to find finances to deliver services to the electorate."Another political scientist, Dr Winford James, said the government would "most definitely" have a political price to pay if it did bring back the Property Tax.
He added that "already people are planning to make them pay that price. The political price that they will pay is in terms of their continuation in office and we have a little way to go for that (to become evident), but the (more immediate) price they may pay is in the Local Government Elections."While not knowing the details of the new Property Tax system, he said, "I don't think we need to speculate very much to see that the Opposition is going to resist very strongly.
"Civic society will come out against them, the trade union movement will come out against them, Jack Warner will come out against them."And you are going to have that in the context where people are talking about corruption. And now you are asking people to pay Property Tax. They are going to be asking whether you are going to be using their money to have us finance your corruption! That question is going to be asked!"