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Make property tax sale power ‘even-handed’

FNM Chairman Dr Duane Sands.

FNM Chairman Dr Duane Sands.

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The FNM's chairman yesterday argued that Bahamians lack confidence that the Government will apply "even-handed enforcement" as it moves to unleash its 'power of sale' on long-standing real property tax duckers.

Dr Duane Sands, a former Cabinet minister and MP, also accused the Davis administration of lacking "the intestinal fortitude" to discuss its ever-stricter tax compliance drive with the Bahamian people despite the publication of yesterday's warning notice that the Department of Inland Revenue intends to seize, and sell-off, properties belonging to delinquents who have made no effort to settle their tax arrears for a decade or more (see article on Page 1B).

His initial voice note, warning Bahamians that "they are coming for your money", provoked a fiery exchange with his PLP counterpart, Fred Mitchell, also minister of foreign affairs, who accused Dr Sands of being "alarmist" in suggesting that the Department of Inland Revenue was "seeking to take the property of Bahamians".

The Department of Inland Revenue notice, which Mr Mitchell conceded could have been more carefully and clearly worded, stated that the tax authorities will exercise their 'power of sale' enforcement measures as permitted under the Real Property Tax Act from June 2023 onwards.

It added that delinquent commercial, residential, foreign-owned land and foreign-owned owner-occupied properties would be subject to the 'power of sale', and could run afoul of the Department if they have been in arrears "for more than seven months".

This caused confusion on two counts. Many appeared to interpret "residential" as including Bahamian-owner occupied properties, even though these are protected by law and excluded from the "power of sale" by the Real Property Tax Act. The Act specifically states that last year's reforms "expand the exercise of the power of sale for tax arrears to all property except owner-occupied property beneficially owned by Bahamians".

Many Bahamian-owned residential properties, especially those in the middle and lower income brackets, also fall below the $300,000 exemption threshold where they pay no property taxes. And Department of Inland Revenue officials explained that, while the seven month timeline is stipulated in the Act, in reality the 'power of sale' exercise is targeted at "extreme cases" who have not paid for up to 10-20 years and have rebuffed all efforts to encourage them to settle.

Echoing this, Mr Mitchell argued that Dr Sands should have checked "before jumping to a false conclusion". He added: "The ad was inartfully written and gave rise to the misinterpretation. The sentence construction listed the descriptions disjunctively instead of conjunctively.

"The economic affairs minister [Michael Halkitis] and the finance minister [Philip Davis KC] have assured me that the idea is to seek to collect monies from non-Bahamian landowners and entities who have tied up lands from development but owe substantial taxes. I have asked the tax authorities to clarify this position by releasing a corrected ad."

PLP supporters on social media also attacked Dr Sands, alleging that he was giving a free pass to tax dodgers and evaders. However, the FNM chairman refuted this as "absolutely" untrue. But, while acknowledging the Government's need to collect all due and owing taxes, he said there were concerns over the process being used to enforce the 'power of sale', its timing with many Bahamians and businesses still struggling to make ends meet, and the lack of public dialogue.

"I think we all acknowledge that the country needs revenue in order to function," Dr Sands said, "but this has been the year of the highest ever expenditure, the biggest Budget ever, and just a tremendous grab to get whatever revenue they can get their hands on.

"We've seen real property tax rates go up by triple digit percentages without any notice. We've seen additional expenditure, and they've just levied fee increases across many, many government services. Notwithstanding that the Real Property Tax Act allows for the Government to sell or garnish a piece of property, this is an historic approach.

"Are they going to be fair and equitable in their approach, and are they going to acknowledge that people sometimes may need to pay their real property tax over the course of the entire year because of the additional expenses persons are experiencing because of the higher cost of energy," he continued.

"A dollar doesn't extend as far as it used to in this era of incredible inflation, and here we have the Government of The Bahamas wanting you to pay them first even if you don't have it. There's no consideration of how difficult, how trying it is for many persons out there. This one, without any discussion, any debate, just shows how far they want to go after this revenue."

The Opposition has blamed the Government's failure to execute the low-cost oil purchase trades to undergird Bahamas Power & Light's (BPL) fuel hedging strategy for the up to 163 percent increase in fuel costs that businesses and some residences will see on their bills during summer's peak consumption. And Dr Sands yesterday accused the Government of failing to do its part by reducing, or controlling, its spending.

Arguing that it has been "spending money left, right and centre" on "the backs of the Bahamian people", he added: "I don't know that Bahamians will have any confidence that there will be an even-handed enforcement of this [power of sale] rule."

Conceding that real property tax compliance, and collection, has been a challenge for all administrations including the one he served in, Dr Sands said there was "no question" that taxpayers have to meet their obligations but there was no recognition by the Government that "some people have to eat, sometimes they have to buy medication and sometimes they have hardship through no fault of their own".

He also voiced concern that application of the 'power of sale' will take a summary, as opposed to legal, approach and questioned whether it would target specific groups. The FNM chairman also contrasted the Government's demands for instant payment of taxes with the fact its creditors, including Bahamian vendors, sometimes had to wait years to receive what was due to them.

"What we are watching is this money grab," he argued. "This is an insatiable desire to get as much money out of your pocket, a tax here, a tax there, come get this money, take this money, and then we'll spend it how we see fit. The Government has to acknowledge its complicity in creating a very challenging economic environment because of its own errors.

"It seems to be saying: 'Oh, well. No big deal. You can pay that, and we are coming after you under threat of garnishing your bank accounts and selling your property. In the last year-and-a-half, some persons have seen their real property tax bills go up by several hundred percentage points without any advance notice." Many of those properties, though, may have been under-valued for years.

Comments

birdiestrachan 1 year, 1 month ago

Same Sands who was front and center when VAT was increased 60% did he care about poor people he only cares when his party is out of power hypocrite of the highest order

Emilio26 1 year, 1 month ago

Notice how Dr Minnis is also in the news every other week criticizing the Davis administration but when he was PM he didn't give a rat's ass about the financial hardships Bahamians faced as a result of his disasterous economic policies.

BONEFISH 1 year, 1 month ago

I am disappointed in Dr.Sands.This is not a political issue. This is an attempt to collect outstanding taxes. This is a man who harbours hopes of eventually becoming prime minister. In a more developed progressive society, his comments would be met with disbelief and laughter. I like him as a person and politician but is wrong in this matter.

ohdrap4 1 year, 1 month ago

I am not surprised, nor worried. As he will not be elected. He tried to take corned beef from the price control and backtracked because of the Corned Beef Revolt march on Bay St.

ThisIsOurs 1 year, 1 month ago

We're doomed if we continue with this money grab. It's exactly what Dr Sands described it to be. Oddly enough its biblical, ~"when you cry to me, in the day when the leaders you chose over me take and take and take and take and take the best of the land, the cars, the houses, the women and the men, I will not hear you." Its literally written. It will only get worse. Tourism numbers are increasing while the impact of the tourist on the economy is declining and we are giving more and more away by fair and foul means to hold on to what we can. When the proponents of these moves cry out, it will be too late

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