The Property Tax should be abolished
Consumer Concerns
Eileen Cox
Stabroek News
May 30, 2004
Consumers have expressed concern about what they perceive as a determined effort to collect Property Tax. Enquire at the Ministry of Legal Affairs or the National Assembly for a copy of the act and you obtain a negative response. There is no indication when copies will be available. So let us seek elsewhere.
In 1989 the Guyana Consumers' Association (GCA) was writing to the Minister of Finance with a copy to the Ministry of Trade and Tourism about the imposition of various taxes including the Property Tax. The GCA said:
"We recommend that Property Tax be abolished. Persons have already paid Income Tax on earnings and should not pay for property in which they reside. Rates and taxes are paid. Rented premises attract income tax."
The Property Tax Act, Cap.81:21 was enacted on November 17, 1962. That was the period of the Kaldor budget and the act may have been one of the recommendations of the famous Mr Kaldor whose tax measures raised storms in some countries.
The act was deemed to have come into operation with respect to and from the year of assessment commencing on January 1, 1962.
In the list of definitions "property" includes immovable and movable property, rights of any kind, whether absolute, conditional, or contingent and effects of any kind, situate or having their seat in Guyana or elsewhere and the proceeds of sale thereof, and any money or investment for the time being representing them.
The act provides for a number of exemptions.
The President, of course, is exempted and any other authority, ecclesiastical, charitable and educational institution or endowment of a public character within Guyana. There is a provision that "the carrying on of a school, college or university otherwise than for private gain shall not for the purpose of this paragraph be held to be the carrying on of a trade or business."
Further, "A fair or fairs shall not be deemed to be trade or business for the purposes of this paragraph unless the number of days on which such fair is held, or aggregate number of days on which such fairs are held, exceeds seven days in the year immediately preceding any year of assessment."
Section 9 of the act tells us what shall be included in the net property of any person. Net property includes any property in which he has only a life interest; being the only beneficiary under a trust, the property subject to the trust; the value of his interest in a firm when he is a partner in the firm. Other property is included.
In section 10 (a) and (b) we learn what can be excluded from net property 10(b) states: from the net property of an individual for any year of assessment can be excluded
(i) his right or interest in any life insurance policy before the moneys covered by that policy became due and payable to him;
(ii) his right to receive a pension or other annuity;
(iii) any tools and instruments (but not plant and machinery) necessary for him to carry on his profession or vocation subject to a maximum of one hundred thousand dollars (originally, five thousand dollars);
(iv) any works of art, including drawings, paintings, photographs, and prints, archaeological, scientific or art collection, books or manuscripts, belonging to him and not intended for sale subject to a maximum of one hundred thousand dollars (originally five thousand dollars);
(v) any household furniture and equipment belonging to him and not intended for sale, subject to a maximum of one hundred thousand dollars (originally five thousand dollars);
(vi) any jewellery belonging to him and not intended for sale subject to a maximum of fifty thousand dollars (originally two thousand dollars);
(vii) the amount to his credit as an employee in any provident fund; and
(viii) any property donated to him subject to life interest in the donor, so long as the life interest subsists.
On the first $7,500,000 of net property owned by a person other than a company there is no charge.
For every dollar of the next $5,000,000 the rate is 1/2 per cent and for every dollar of the remainder of the property the rate is 1/4 per cent.
The act has had many amendments, some of which are included above. A husband and wife will now file individual returns.
It is to be hoped that the Guyana Revenue Authority will collect from all who are taxable or not at all.