According to the Prime Minister, $30 million in revenue will come from improved administration because the government is serious in its intention to deal with tax fraud and tax cheats.
There are many ways that the government intends to improve the level of tax collection, according to officials.
Parliamentary Secretary in the Ministry of Finance Michael Halkitis said in an interview with the Bahama Journal Tuesday that one of those ways is tightening up on the collection of real property taxes.
He said for years some Bahamians have not been paying real property taxes.
Mr. Halkitis indicated that despite the Business License and Valuation Office’s ongoing attempts to record all properties in the country, there are some, however, that have not been recorded, resulting in a deadweight loss to the economy.
The Parliamentary Secretary pointed out that the government’s first order of business in plugging such loopholes would be to bring the country’s real property tax valuations up to date with the help of the Ministry of Works.
Once a home is completed, the Ministry of Works issues a copy of the homeowner’s occupancy certificate to the Business License and Valuation Office, indicating that the house is ready to be moved into.
But according to Mr. Halkitis, this is not always the case. Sometimes, he said, the Office does not receive a copy at all.
“We are now hoping to ensure that the Office’s registers are updated, in which case a reassessment would determine that whatever’s due is paid,” he said. “At the same time, this procedure would also determine whether or not some homeowners should be exempted from paying real property taxes if their homes were valued at $250,000 or less.”
The Business License and Valuation Office levies a 10 percent penalty on homeowners for all delinquent accounts not settled before December 31 of each year.
The percentage is paid on the principal outstanding amount.
Building on sentiments expressed by the Prime Minister two weeks ago during the Budget Communication in the House of Assembly, Mr. Halkitis noted that the government is also hopeful that tightening its belt on revaluating properties would jumpstart revenue projections.
“For some properties, a revaluation has not happened for a number of years, which is generally supposed to take place every three to five years,” he said.
” In these cases, there are homes that may have been registered at $100,000. Since first being built though, the homeowner may have added or made improvements to the property, pushing the value even higher. Nonetheless, he or she is still paying the initial amount to the government.”
Then there is also the problem of the government placing a firm grip on ensuring some hotel owners pay fees reflective of the size of their businesses.
Given that the fiscal deficit is projected to be $122 million, government officials point to the need to cut down on revenue leakages.
The Bahama Journal
