During last week on a television call-in programme, the guest Mr Manzoor Nadir in reply to a caller concerning Property Tax (GRA), said that even though the threshold had not increased, the rate had been reduced about five or six years ago.
I wish to say that this is not so. The last time that the Property Tax was amended to the benefit of the taxpayer was in the budget of 1999, since Mrs Janet Jagan was President, more than thirteen years ago. Even then, the rate was not changed, only the threshold moved from $ 5 million to $ 7.5 million. The rate remained at 0.5 % for the first $5 million and 0.75 % thereafter. The allowance for furniture remains at the ridiculous figure of $100,000 and jewellery at $50,000. There are no allowances for kitchen equipment, motor car (not even a bicycle), house, clothing, etc.
About the middle of last year I mentioned to a very senior person from the PPP and PPP/C about the government making some adjustments to personal Property Tax. She promised to look into it. Since then I haven’t heard anything on this matter from her. This year’s budget has nothing on it.
The rate of the tax has to take into consideration the interest rate obtained at the banks. The average rate of interest at the banks is less than 2%. At 2%, one has to pay 20% income tax on the interest which brings the after-tax rate to 1.6 %. From this, subtract 0.75 % property tax on the capital which leaves a net interest rate, after income and property tax, of 0.85 %. This cannot give me a decent pension when I retire in a few months time.
I am not a man of any wealth, yet I am paying almost one month’s salary per year for Property Tax. When I retire, it will take four months of my NIS pension to pay my annual Property Tax.
I have always held that very citizen who is eligible to pay taxes should do so including the President of Guyana, whilst he is serving or even more so when he’s getting a pension. When a former President has to pay $1 million per year for Property Tax on just his house and furniture, only then can he understand what others have to go through.
J Fazel Khan