Dear Editor,
It was reported that the Tax Reform Committee (TRC) set up by the Ministry of Finance has made its recommendations in a recent report. Among several recommendations is the reintroduction of the estate duty that had been abolished in the 1990s. The TRC proposed that there be zero tax on gross wealth less than $100,000, 0.5% between $100,000 and $40 million, 3% between $40 million to $100 million, 5% between $100 million to $200 million and 10% over $200 million.
Lots of big numbers, yet there is no mention of how the government would obtain or arrive at valuations. One method is the banks would have to provide personal financial information to the government. Another, is the courts signing off on orders to search under mattresses.
Let’s start with obtaining financial information from the banks. Will the order be used only for taxation purposes? Does it include opening up safe deposit boxes? Foreign bank accounts? What does the government intend to do with the tax proceeds? Is this a policy of wealth transfer from the rich to the poor? Will there be tax on remittances? If so will this be taken into consideration? What assets would be included in the definition of wealth, ie, market rate for land or book value? Spot exchange rate for foreign currencies? How will they value paintings, antiques, etc?
This is an excellent revenue generator for the government. The question is accounting methodologies, private versus government. My issue is the debt of the financial market to determine the market value. I am confident the TRC has the expertise. My concern is sophistication of the wealthiest section of the population ‒ the $200 million and up.
Yours faithfully,
Keith Bernard
