‘Taj Mahal’ tax will be counter-productive

Dear Editor,

Please permit me to respond to the `Taj Mahal Tax’ proposal of Dr. Asquith Rose and Mr. Harish S. Singh in the SN letter column of March 14, 2013. I respectfully urge these gentlemen to reconsider and withdraw their proposal. A tax on a home valued more than $20 million (GYD) will have  a perverse impact.

First, one must recognize that housing construction in Guyana came to a virtual standstill from 1970-1990. The Guyanese housing stock is woefully deplorable.

To tax homes that exceed $20 million (GYD) is counter productive; it will stanch the growth in new construction. Guyanese must move away from the “logie mentality.” We must aspire to create new homes and neighbourhoods that are spectacular.

Secondly, to tax homeowners whose houses exceed $20 million (GYD) will have a perverse effect. Homeowners will neglect the exterior of their home to give the impression that their property is valued less than the threshold.

In effect, all the new construction and maintenance will come to an end and Guyana will look like a sprawling slum. This would be the sad effect of implementing the so-called “Taj Mahal Tax.”

Third, if the proponents of the “Taj Mahal Tax” are serious about tax reform they should advocate an across the board elimination of the so-called luxury taxes. We live in a world where the automobile, SUV, truck are not luxury goods but the basic necessity of modern life.

The astronomical taxes on these goods ripple throughout the economy -for example, small farmers cannot afford to buy cheap trucks to bring their produce out from the farms.

Which in turn hurts the urban consumers who have to bear the high cost of transportation. Eliminating these counter-productive taxes will make agriculture more productive and benefit the consumer.

I respectfully ask Dr. Rose and Mr. Singh to reconsider and withdraw their proposal for increase taxation and for them to advocate an all around overhaul of the tax codes to eliminate taxes that penalize capital formation.

Yours faithfully,
Roger Ally