February 27, 2013
A well-known businessman is blasting the government's amnesty program to boost property tax compliance, insisting that real consequences are the only way to fix the problem. Dionisio D'Aguilar, the owner of Superwash, said that a similar program was attempted by past administrations. And what is true now, and true then, is that Bahamians seeking to evade taxes will continue to do so unless they're forced into compliance. "If we don't see consequences, we won't comply," he told Guardian Business.
"Rather than giving me amnesty, double the tax and confiscate the property if I don't register my property." He argued that the majority of people not registered, thought to be in the range of 30 percent, are content to remain in the shadows. Under the new program, announced by the government on Monday, residential and commercial properties not on the books are exempt from any property taxes owed if they register by June of this year.
For registered property owners with arrears of less than three years, the government plans to waive 50 percent of what's owed in assessment and surcharge if payments are made by the June deadline. Property owners with arrears beyond three years benefit from a complete waiver of charge payments only, provided there is a payment made by December 31, 2013. And to reward those within the letter of the law, the government will rebate five percent of annual real property taxes if the owner remains current on payments over the next three years.
"You gotta get tough," D'Aguilar argued. "Otherwise you'll still get massive non-compliance. These measures don't force people to comply. You have to force them. Stop offering them deals." The former Chamber chief said the government needs to get serious, but it's reluctant because the administration could be cast in a poor light. But like the value-added tax (VAT) and cuts to public spending, D'Aguilar insisted that hard decisions are needed to improve the economy.
George Damianos, the president of Damianos Sotheby's International Realty, told Guardian Business that he is "somewhat on the fence" on the amnesty plan. While there is no question that the government needs to get people to pay property taxes, he admitted that waiving taxes for those not registered may not be enough to make them come forward. In particular, he noted there are many people in arrears well into six figures, making any discount a relative drop in the bucket. "It is not enough of an incentive, especially for those with major loans. I don't think it'll be a big incentive to get people to pay," he told Guardian Business. "I also think there needs to be penalties to come along with it."
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