CL Financial bailout – the endgame

Lawrence Duprey and the other CL Financial chiefs could soon be regaining their positions, which is a public concern at this time. I consider that to be an unacceptable prospect and that was stated in my joint open letter to the Central Bank Governor on 31 January 2017. Both Anthony Wilson and Mary King took issue with those views of mine in the Business Guardian of 27 April 2017.

The arguments coming from Wilson and King emphasise Duprey’s property rights as the major shareholder of CLF. Wilson, who is the Business Guardian editor, appears to agree with me that the CLF chiefs could not satisfy the central bank’s ‘fit and proper’ rules which apply to those who direct, manage and hold controlling shareholdings in financial institutions. He also made the important point that there are companies in CLF which are not financial institutions and therefore Duprey ought to be able to regain control of those, provided the bailout sums are recovered. The main non-financial companies in the CLF group are Home Construction Ltd., Angostura, CL World Brands and CL Marine. I am still unclear, from Mary King’s article, whether she holds the view that the CLF chiefs are still fit and proper persons. Continue reading “CL Financial bailout – the endgame”

AUDIO: Interview on the return of the CL Financial chief

power102fmThis is an interview on the issue of Lawrence Duprey regaining control of CL Financial…Richard Noray and I were interviewed by Andy Johnson on ‘Impact TT’ on Sunday 30th April 2017 on Power 102.1 FM. Audio courtesy Power 102.1 FM.

Programme Date: 30 April 2017
Programme Length: 00:33:14

AUDIO: Property Tax interview on 96.1FM

This is my interview on 96.1 FM with Nikki Crosby on Tuesday 2nd May 2017…this was a great session with Tweez…Rodey and Raw Fusion…there were also some engaging ‘phone calls and text messages from the public. Audio courtesy TTRN

Programme Date: 2 May 2017
Programme Length: 00:34:37

Response from Central Bank on the CL Financial bailout

Central Bank replies to our open letter of 31st January 2017 on the CL Financial bailout.

On 31st January 2017 I co-signed an open letter to the Central Bank Governor on the CL Financial bailout. My collaborators were Rishi Maharaj of Disclosure Today and David Walker, with our common purpose to pointedly question the Central Bank’s handling of the bailout.

When over two months passed without a reply or acknowledgment, we decided to act again to bring the issues forward. On 19th April 2017, we delivered the letter again to the Governor’s office, this time with media coverage.

That approach seems to have worked, since the Central Bank actually replied on 21st April 2017 – see attached.

Of course there is no real reply to our queries, so we will be doing a thorough reply on those issues.

Property Tax FAQs

This article contains background information on the new Property Tax and answers some Frequently Asked Questions.

Getting the data
In this information age, the government was not able to create an accessible database into which property owners could have directly uploaded the required property details. Why not adopt this more efficient method to gather the information? We can, and must, do better.

Whose Taxes?
These taxes seem to be payable to the Consolidated Fund. It is my view that they ought to be collected by the respective Local Government bodies.

I support the re-instatement of the Property Tax, it is long-overdue and property owners have enjoyed a seven-year holiday since it was last collected in 2009. I have two substantial criticisms which are set out in the sidebar, but overall this is an important and positive move by the government.

There are strong objections and many questions on this new tax with two main sources – people who are genuinely unsure of how the new arrangements will work and political objectors from the Opposition.

These are the national totals of Property Tax paid in the period 1993-2009, compiled from –

  • House Rates, which is paid in Municipal Corporations, from the Estimates of Revenue and Expenditure for the Statutory Boards, Similar Authorities and the THA.
  • Land & Building Taxes, which is paid in the rest of the country, from the Estimates of Revenue.

property tax1993-2009

Millions TT$
Year Land & Building Taxes House Rates TOTALS
1993 72.04 17.83 89.87
1994 109.38 22.78 132.16
1995 60.89 22.55 83.44
1996 58.64 28.81 87.45
1997 56.63 26.61 83.24
1998 55.78 25.49 81.27
1998/1999 61.56 31.56 93.12
1999/2000 63.90 35.48 99.38
2001 59.11 35.97 95.08
2002 94.08 35.57 129.65
2003 77.50 49.19 126.69
2004 85.54 59.00 144.54
2005 62.68 61.35 124.03
2006 64.35 55.91 120.26
2007 83.72 66.16 149.88
2008 83.77 66.16 149.93
2009 72.77 69.75 142.52

The objections from the Opposition elements are bemusing, to say the least, given the pattern of tax collections set out in the graph and table. Plainly, when the UNC was in power in the period 1995-2001, there was a dramatic and unexplained decline in the collections of property tax. That decline was reversed when the UNC left office.

An explanation as to the dates – Up to the start of 1998, the country’s fiscal year-end for national accounting was 31st December. There was a transition between 1998 and 2001, with periods to be read as follows ‘1998’ is 1st January to 30th September of that year: ‘1998/1999’ is 12 months ending 30th September 1999 and 1999/2000 being 12 months ending 30th September 2000.

FAQs

I built this property with my own money and effort, so why should I have to pay taxes on it?

This common argument is simply untenable, since if that principle were widely applied there would be no case for any type of Corporation or Personal taxation.

We already pay Stamp Duty when we buy our properties, so why should we have to pay more than one tax? Isn’t that ‘Double-Taxation’?

Again, returning to the comparison with companies, tax is due in different modes such as VAT on sales, Green Fund, Business Levy and Corporation Tax on profits. What is it about property which creates the justification for a single mode of taxation?

Do I have to complete the Valuation Return Form or let Field Assessors into my property?

There are penalties for non-compliance with those requirements and of course there is the prospect that there will be the usual bane of non-enforcement, but there are perils to that course of action. If a property owner did not comply and then appealed the assessment, it would be an uphill battle to persuade a tribunal that the State had acted unfairly when one had not provided the accurate information as required.

What about properties which are not actually rented? Why is Property Tax due on those?

This is a tax on the rental value of the property, levied on its owner, who can either benefit from the rental itself or the pride of ownership arising from having no rent to pay.

How can an estimate be done of rental value if no property is rented in the area?

That is a matter of professional judgment based on the available records and rental advice forms part of every mortgage valuation in every part of the country at present.

The innate effectiveness of this tax is that property is an immovable asset, so those persons and companies which are now evading other taxes will be unable to escape this new tax on the various properties in their ownership.