Increase in Property Tax Compliance

Minister of Finance and the Public Service, Audley Shaw, has said that there has been an increase in property tax compliance of the last three years.
“The taxes collected from April 2005 to March 2006 was $1.47 billion. The amount collected from April 2006 to March 2007 was $1.8 billion and the property tax collected from April 2007 to January 2008 is $1.49 billion,” he informed on March 4.
The Minister was speaking in the House of Representatives where a Bill to amend the Property Tax Act to make permanent, the rate of property tax which was introduced in 2005 under the provisional Collection of Tax Act, was passed.
The move was to improve on the rate put in place with effect from April 2003, whereby the property tax was capped based on 11 value bands.
Minister Shaw informed that although there was a certain amount of relief to many taxpayers based on the cap and the value bands “that system was far from being considered equitable.”
“For example, for unimproved property values between a $1 million and $2.5 million, the tax liability was $4,000. Property values between $2.5 million and one dollar to $5 million was $11,000 and property values of $5 million and one dollar to $10 million was $87,000,” Mr. Shaw said.
This system, he said, was therefore discontinued and the value bands and the caps were removed and the present much simpler system was introduced.
Mr. Shaw attributed the increase in compliance to this system, which provides for a threshold of $300,000; a flat rate of $600 to be paid on values up to that threshold; and a rate of 0.5 per cent on any amount of value in excess of $300,000.
“This has led to increased collection of property taxes. It is hoped that (with) this system, the compliance should increase further and more revenue collected for the Parochial Revenue Fund, which has been established under the Parochial Rates and Finance Act,” Minister Shaw said.