Whatever happened to the tax confidentiality?

Jun 03, 2020 Features / Columnists, Peeping Tom

It is unethical, unprincipled and unprofessional for any municipal official – whether elected or appointed – to be discussing in the public domain, the amount of rates, taxes or arrears which any specific ratepayer owes. No municipality should have reason to be naming and shaming any ratepayer.
No one needs psychic powers to know that had the owner of Giftland Mall not made comments in support of democracy and transparent elections, his tax issues with the municipality would not have been in the media. The only reason that this is happening is because of the actions which he took in recent months, actions to which any citizen is entitled.
There is a bigger issue here involved when it comes to rates and taxes. That issue relates to the fairness of the municipal tariffs.
Municipal rates and taxes are inequitable. The burden of rates and taxes falls disproportionately on the business community. Businesses shoulder the greatest burden of municipal taxes. The differential between rates and taxes charged to businesses as compared with private households is huge and is unfair. And one of the reasons for this huge differential is that rates are levied not only in relation to the value of property but also in relation to whether the use of the property is commercial, industrial or residential.
Even when it relates to the use of the pavements, businesses are charged a higher rate than illegal vendors. The weekly cleaning fee which is charged to business owners during Christmas time was far higher than the fee which was charged to the vendors illegally squatting in front of businesses on Regent Street.
Businesses who are in arrears with their rates and taxes have become whipping boys for municipalities. But without the taxes paid by businesses, town councils would have long collapsed. Even governments would not have been able to afford to bail them out.
It is true that businesses owe the largest sums outstanding in most municipalities because they are assessed huge sums. But tens of thousands of residential homeowners across Guyana are also in arrears. A few years ago, it was reported that as much as 1/3 of homeowners in the city were in arrears with their rates and taxes.
And these residential property owners are charged a pittance for rates and taxes. Yet no one sees any municipal official going public on television to discuss the arrears of a particular residential property owner.
The rates charged to businesses are so high, when this falls into arrears and attracts interests, the amount owed increased almost exponentially. When you consider that interest on arrears can be high as 20%, you can appreciate the problems this poses for businesses.
Many businesses want to pay their rates and taxes but the interest is so prohibitive that they cannot. And so the amount increases year after year to the point where sometimes it surpasses the market value of the property and then there is simply no incentive for the business owners to pay. Many persons have lost their property because of the accrued arrears plus interest.
It is time for greater equity in the system. Rates and taxes should bear some relationship to the value of services provided by municipalities. Many businesses have been forced in many instances to undertake infrastructural works, to pay for garbage collection and to high security fees simply because the municipalities cannot guarantee a reliable or effective service.
Businesses should be entitled to deduct the cost of infrastructural work which they have been forced to provide because municipalities cannot do so. This would provide a greater incentive for businesses to undertake infrastructural work which the municipalities are unable to afford at any time.
There is no equity also when it comes to vending. One reason why rentals for market stalls have been so low is because market vendors complain that they are not making money. And they are not making money because there are just as many vendors plying their trade inside the markets as there are outside.
Municipal rates and taxes need to be made more equitable. But this is not going to happen unless this is enshrined in our country’s municipal laws. If and when there is such a move, those responsible should use the opportunity to ensure greater professionalism on the part of municipal officers. There should be a prohibition on a person’s rates and taxes being publicly ventilated.

(The views expressed in this article are those of the author and do not necessarily reflect the opinions of this newspaper.)