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City Council loses bid to impose 400% retroactive tax interest on Houston Estates
City Mayor, Ubraj Narine
Kaieteur News – The High Court has quashed a decision by the Mayor and Councillors of the City of Georgetown (M&CC) to impose interest retroactively at 21 percent on Houston Estates. The ruling was delivered by Justice Nareshwar Harananan, at the High Court on Friday.
According to the decision, the Court has ordered and declared that the move by the Council to impose interest retroactively in the general rate demand notices of 2019 and 2020 is an unreasonable exercise of its discretion. The court said too that the move was unlawful and ultra vires.
The case has its genesis in the demand for the general rates, arrears of rates and accrued interests, issued by the Mayor and Councillors of the City of Georgetown to Houston Estates, whose Chairman is Michael Vieira.
The demand for taxes was issued in November 2019 and February 2020, in respect to lands located at Plantation Houston and Rome, both on the East Bank of Demerara, but following under the jurisdiction of the M&CC. The demand for taxes contained a significant increase in the percentage of rates from 40% to 440% of the assessed value.
Prior to the year 2005, the Council assessed and levied against Houston Estates in respect of those lands at the rate of 40%.
As such, Houston Estates took the Council to Court contending that in June 2005, the M&CC purporting to increase the percentage rates by 10 times the previous rates to 400% is unreasonable, since their lands were classified ‘land only.’ They objected and entered discussions with the Council contending that they (the Council) did not contemplate that the lands were within a ‘Green Belt’ used for agricultural purposes.
Vieira had previously disputed that the company owes $400M in land taxes to the Mayor and Councillors of the City of Georgetown. In response to claims by the Council, Vieira told Kaieteur News that Houston Estates has been punctual in paying all rates due to City Hall in full, every year.
He noted “Sometime in 2005, the Council decided to increase the taxes on vacant lands in the city from 40 % to 400% of the assessed value. We had pointed out that the land owned by the estate is agricultural lands and not vacant lots. We had an agreement to pay them only 40% in exchange for no services provided.”
Vieira explained that the deal for reduction of taxes to 40% was struck with the Council in exchange for services provided to Houston and surrounding areas.
He said that no services were provided by the Council to the lands of the estate. The businessman said that in fact, it’s been more than 100 years that Houston Estates has been providing drainage service to the villages of Meadow Bank, Houston, McDoom and Agricola, free of cost.
Despite this, Vieira noted that the Council has become insistent on levying the company of 400% on the lands.
In the ruling on Friday, the High Court ordered and declared that Houston Estates is not indebted to the Council for payment of rates in respect of the properties as set out in their claim.
The Court also struck out the 440% retroactive and 21% interest compounded day to day on the assessed arrears of rates on grounds that it is unreasonable, unlawful and ultra vires the power of the Council under the Municipal and District Councils Act, Cap, 28:01
Among other orders, the High Court said that award of costs to Houston Estates in addition to interest at the rate of 4% per annum from the date of the judgment until it is fully paid.
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