Between value-added tax (VAT), real property tax and business license fees, taxpayers continue to owe to the government more than $1.1 billion, according to the government’s 2023/2024 budget book.
The bulk of that missing revenue is from real property tax, the payment of which the government has cracked down on since last year. The bulk of the missing real property tax is owed by foreigners – more than $214 million.
Financial Secretary Simon Wilson said on Friday that the government has begun to see an uptick in real property tax collections. He explained that the government’s budgeted $3 billion in revenue is largely due to improved performance in consumption taxes.
“The big driver for revenue has been improved performance in the consumption taxes, obviously customs duties, excise taxes, as well as improved performance from departure taxes with the opening of the economy. VAT (value-added tax) is performing very well. Property tax is performing.”
He added that the government has begun to see its condo-hotel tax start to emerge as a big earner.
“It’s now starting to pick up momentum and steam,” he said.
“That was introduced last year for persons who have units in the rental pool where they were [originally] exempt from a property tax…”
According to the document on the condo-hotel tax guidance: “The condo-hotel tax has a rate of 75 percent of the rate of tax applicable to residential property under the Real Property Tax Act, on the value assessed by the chief valuation officer of each property that forms a part of the condo-hotel or hotel rental pool up to a maximum amount of $150,000 per unit.
“However, during the first year unit owners and administrators will only be required to pay half of this charge. The current rate of tax for residential property under the Real Property Tax Act is 0.625 percent of the value of the property.”
The budget document explains that from July 2022 to March 2023, value-added tax arrears totaled more than $159 million, real property tax arrears totaled more than $885 million, and business license fees more than $86 million.