Bertram THE GOVERNMENT is neither considering an increase in property tax nor a change in the method of its evaluation, Minister of Local Government, Youth and Comm-unity Development, Arnold Bertram, has informed the House of Representatives.
He also told the House that the value of all properties on the tax roll amounted to $86.6 billion and the total amount of property tax being collected is approximately $900 million, annually.
He was responding to questions relating to property taxes from Andrew Holness (JLP, West Central St. Andrew) on Tuesday.
The questions tabled by Mr. Holness and Mr. Bertram's responses were as follows:
Question: What is the mechanism by which Property Taxes are presently assessed?
Answer: The Land Valuation Act makes provision for the value of all parcels of land in Jamaica to be assessed, based on the unimproved value of such lands, for the purpose of Property Taxes. The Act stipulates that such valuation exercises should be conducted every five years.
Valuations take into account inter alia, the following factors: Size of the parcel; location and use; land prices in the area; zoning; development potential; type of land; topography; and soil classification.
Once the valuation of all parcels is determined, the Minister of Finance and Plann-ing sets the rates at which the taxes on various parcels are to be assessed.
Question: Is the proposed increase in revenue from Property Tax to be secured by revaluing properties as re-quired by the Land Valuation Act or by an increase in the rates applied to the various values or by both?
Answer: The Government is not now considering an increase in the rate of Property Taxes. Our projections for increased revenues contemplated for this fiscal year are based on measures aimed at increasing the present rate of compliance through a number of initiatives. These include: Additions to the Property Tax Roll of parcels of land which are not presently included on the Roll; improved distribution of assessment notices; an intense public education campaign to be launched by the end of this month; special measures to collect outstanding arrears.
Valuation system
Question: Is the government contemplating a change in the valuation system from unimproved value to improved value?
Answer: No consideration is being given to changing the current method of valuing properties.
Question: What are the bases for exemption from Property Taxes and what groupings are the largest beneficiaries for exemption?
Answer: Exemptions from Property Taxes are granted based on the provisions in Section 10 of the Property Tax Act and also individual statutes establishing individual statutory bodies. The Government of Jamaica, including statutory organisations, is the largest beneficiary of exemptions. On the Tax Roll most Government properties will appear with the name of owner as the Commissioner of Lands.
Question: Will the removal of exemptions mean the removal of applications for relief?
Answer: The short answer is no! The removal of exemptions will not mean the removal of applications for relief, since relief is granted under the Land Taxation Relief Act.
There is no intention to change the existing provisions under which persons may be granted relief from Property Taxes, or for properties that are classified as agricultural to be de-rated.
Question: What portion of Property Taxes goes directly to the Local Authorities and how is it spent?
Answer: 100 per cent of gross Property Taxes collections (minus any refunds and a 21/2 per cent collection fee which is retained by the Inland Revenue Department) are paid into the Parochial Revenue Fund. Of this amount, 90 per cent of the collections, in respect of each parish, are paid directly to the respective Local Authority. The remaining 10 per cent goes into an Equalisation Fund, which is available to be drawn upon by Parish Councils or the KSAC, by application to the Minister of Local Government.
The proceeds of Property Taxes are essentially dedicated to fund property related expenses. However, given the low level of collections, it is presently used by Local Authorities primarily to pay for the Solid Waste Management Programme.
Question: What is the present value of the land on the Tax Roll?
Answer: The present value of all properties (677,230) on the Tax Roll is J$86,657,332,573.
Question: What is the present land tax revenue?
Answer: The total amount of collectible from Property Tax is $899,691,739.93 per annum including exemptions and de-ratings and the amount collected for fiscal year 1999-2000 was $518m.
