Leave of Absence Friday, December 18, Friday, December 18, 2009 The House met at 1.30 p.m.

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1 293 Leave of Absence Friday, December 18, 2009 HOUSE OF REPRESENTATIVES Friday, December 18, 2009 The House met at 1.30 p.m. PRAYERS [MR. SPEAKER in the Chair] LEAVE OF ABSENCE Mr. Speaker: Hon. Members, I have received communication from the hon. Nizam Baksh, Member of Parliament for Naparima, requesting leave of absence from today s sitting of the House, likewise the hon. Kelvin Ramnath, Member of Parliament for Couva South, for today's sitting of the House. The leave which these Members seek is granted. PAPERS LAID 1. Audited financial statements of the Caribbean Media Group Limited for the financial year ended December 31, [The Minister of Finance (Hon. Karen Nunez-Tesheira)] To be referred to the Public Accounts (Enterprises) Committee. 2. Freedom of Information Act, 1999 annual report to Parliament for [The Minister of Information (Hon. Neil Parsanlal)] 3. Annual audited financial statements of the Youth Training and Employment Partnership Programme (YTEPP) for the financial year ended September 30, [Hon. K. Nunez-Tesheira] To be referred to the Public Accounts (Enterprises) Committee. 4. Report of the Auditor General of the Republic of Trinidad and Tobago on the financial statements of the Deposit Insurance Corporation for the year ended September 30, [Hon. K. Nunez-Tesheira] 5. Second report of the Auditor General of the Republic of Trinidad and Tobago on the financial statements of the Sangre Grande Regional Corporation for the year ended September 30, [Hon. K. Nunez-Tesheira] 6. Second report of the Auditor General of the Republic of Trinidad and Tobago on the financial statements of the Sangre Grande Regional Corporation for the year ended September 30, [Hon. K. Nunez-Tesheira] Papers 4 to 6 to be referred to the Public Accounts Committee.

2 294 Papers Laid Friday, December 18, Annual audited financial statements of the Trinidad and Tobago Film Company Limited for the financial year ended September 30, [Hon. K. Nunez- Tesheira] 8. Annual administrative report of the National Insurance Property Development Company Limited for the period 2005 to [Hon. K. Nunez-Tesheira] 9. Annual administrative report of the Ministry of Education for the fiscal year 2005 to [The Minister of Education (Hon. Esther Le Gendre)] SPECIAL SELECT COMMITTEE REPORTS (PRESENTATION) Trinidad and Tobago Football Federation (Inc n) Bill The Minister of Social Development (Hon. Amery Browne): Mr. Speaker, I wish to present the First Report of the Special Select Committee appointed to consider and report on a Bill for the incorporation of the Trinidad and Tobago Football Federation and for matters incidental thereto. Status Of Children Bill The Minister of Works and Transport (Hon. Colm Imbert): The Fifth Report of the Special Select Committee appointed to consider and report on a Bill relating to the protection of children and for matters related thereto. ORAL ANSWERS TO QUESTIONS The Minister of Works and Transport (Hon. Colm Imbert): Mr. Speaker, the Government is in a position to answer questions Nos. 109 and 111 today and we request a deferral of the other questions on the Order Paper, please, for two weeks. The following questions stood on the Order Paper: Johns Hopkins University/Hospital (Terms and Conditions of Arrangement) 8. Could the hon. Minister of Health state: (a) whether there is any formal arrangement between the Government of Trinidad and Tobago/Ministry of Health and the Johns Hopkins University/Hospital for the provision of services to the people of Trinidad and Tobago; and (b) if the answer to (a) is in the affirmative, could the Minister state the terms and conditions of the arrangement? [Dr. H. Rafeeq]

3 295 Oral Answers to Questions Friday, December 18, 2009 Registered Private Hospitals (Details of) 25. Could the hon. Minister of Health state: (a) how many private hospitals are registered under each of the (6) classes of private hospitals according to the Laws of Trinidad and Tobago, Chap. 29:03, section 8; (b) the date the licence was issued for each; and (c) what was the last date an inspector or inspection team inspected the hospital as required according to sections 18 and 19 of Chap. 29:03 of the Laws of Trinidad and Tobago? [Dr. T. Gopeesingh] Summit of the Americas (Details of Cost) 58. Could the hon. Minister of Finance state: (a) The budgeted cost for the Summit of the Americas? (b) Whether there were any cost overruns? and (c) If the answer to (b) is in the affirmative, how much did the overruns amount to and the areas where they occurred? [Mr. V. Bharath] Pre-Summit Preparations (Details of) 64. With respect to the pre-summit preparations could the hon. Minister of Trade and Industry and Minister in the Ministry of Finance please advise: A. The number of personnel who were hired; (i) to clean the area along the route travelled by the summit participants; and (ii) paint the curb walls and road barriers along the route? and B. Whether this work was done by existing CEPEP and URP workers? [Mr. J. Warner] National Flag (Details of) 110. With respect to the national flag located at the Hasely Crawford Stadium could the hon. Minister of Sport and Youth Affairs state: a) the dimensions of the National flag;

4 296 Oral Answers to Questions Friday, December 18, 2009 b) the cost of the flag, flagpole and any cost associated with the erection of same; c) the name of the supplier of the flag and flagpole; the procedure for the procurement of this particular flag and flagpole; and d) whether there are any recurrent costs associated with the flag; if the answer is in the affirmative, please state the costs? [Mr. J. Warner] Questions, by leave, deferred. Quasi State Enterprises (Details of) 109. Dr. Keith Rowley (Diego Martin West) asked the hon. Minister of Finance: With respect to the following state or quasi state enterprises: UDeCott Home Mortgage Bank TTMF NIB NIPDEC A. Could the hon. Minister of Finance state, for each agency/company: i. the total monthly emolument package attached to the position of Executive Chairman/Chairman namely-: salary and perquisites; ii. the other financial beneficial considerations attached to these positions (including housing, transport, overseas travel, entertainment and medical allowances/facilities); iii. the provision for any bonus payment relevant to these positions and the basis for such payments as they exist in any of these agencies/companies; iv. the actual sums of any bonus paid to the holder of these offices in these companies for each year from 2006 to present? B. With respect to UDeCott, could the Minister indicate: i. when was the post of Executive Chairman first introduced; ii. whether the contract of the incumbent in this position was recently renewed; iii. the date of the last renewal of the contract of the incumbent; and

5 297 Oral Answers to Questions Friday, December 18, 2009 iv. an indication of the change in the terms and conditions of the current contract compared with the previous? The Minister of Finance (Hon. Karen Nunez-Tesheira): Mr. Speaker, as the hon. Member for Diego Martin West should be aware, in August 2006, the Cabinet of which he was a part, agreed to the establishment of the post of Executive Chairman of UDeCott. This decision was informed by the need to advance the developmental objectives of the Government and in particular the expeditious and cost-effective implementation and delivery of a number of critical projects consistent with our Vision The projects being implemented by UDeCott are critical for national development and the successful delivery of same is dependent to a significant degree on the delivery model methodology employed and the manner in which the projects are managed and monitored. The present Executive Chairman was a member of the Working Committee set up by the then Cabinet in 1993, to advise on the establishment, role, resourcing and setting up of an urban development company in Trinidad and Tobago. He was a member of the initial Board of UDeCott, which was established in 1993 and its three-year terms were renewed successively, including under the former UNC administration s six years in office. Under his stewardship, UDeCott was able to deliver a number of major development projects throughout Trinidad and Tobago, including relocation and outfitting of new offices for the Red Cross; the Hyatt Hotel in Port of Spain International Waterfront Centre, which was used during the recently concluded Fifth Summit of the Americas and CHOGM; the Los Iros Bridge built by local contractors within budget and three months ahead of schedule; the Prime Minister's Residence and Diplomatic Centre; the completion of the offices at Alexandra Street/St. Clair Avenue, on behalf of the then Ministry of Public Administration and Information; and the National Academy for the Performing Arts. In addition to these achievements, UDeCott has delivered valuable additions to the nation's housing stock, including the Green Street Housing Development; the Oropune Housing Development; the Lady Young Road Apartments, Morvant; and the Olera Heights Housing Development. This brings me to the question of remuneration as linkage to performance. In Trinidad and Tobago, the compensation package for the position of an executive chairman in any state or quasi-state enterprise is determined by the Public Sector Negotiations Committee, but compensation received by a chairman is determined

6 298 Oral Answers to Questions Friday, December 18, 2009 [HON. K. NUNEZ-TESHEIRA] by Cabinet in accordance with the guidelines provided by the State Enterprises and Statutory Agencies Classification List. During the period September 01, 2006 to September 30, 2009, the monthly salary earned by the Executive Chairman of UDeCott was $85,000 as set by the Public Sector Negotiations Committee and as October 2009, the salary was increased by the Public Sector Negotiations Committee to $90,000 per month. The other financial beneficial considerations attached to the post of Executive Chairman of UDeCott, which have remained unchanged from 2006, are as follows: Provision of a motor vehicle not to exceed $425,000 (exclusive of motor vehicle tax); Housing allowance of $6,000 per month; Telephone allowance of $500 per month for a land line, plus overseas calls supported by documentary proof; Provision of a cellphone with a monthly allowance of $500 per month; Entertainment allowance of $2,000 per month; Group life plan with coverage of up to two times annual basic salary; Health Plan membership in the corporation's health plan and an annual executive medical not exceeding $2,500 in value; and Gratuity equivalent to 20 per cent of basic salary earned over the period of employment, subject to deductions for tax purposes upon successful completion of the terms of engagement. That is the position with UDeCott. The Home Mortgage Bank the monthly fee attached to the position of Chairman of the Home Mortgage Bank is $14,375. These fees became effective on July 01, Other financial beneficial considerations for the post of chairman are annual foreign leave; foreign travel, which is an annual entitlement of $46,000; and a motor vehicle. With regard to these benefits, the current chairman has not availed himself of the use of a company vehicle or payments in lieu thereof and has not received any payments to date, for foreign travel. There is no provision for bonus payment for the position of chairman and there have been no bonus payments to the holder of this office from 2006 to present.

7 299 Oral Answers to Questions Friday, December 18, 2009 Trinidad and Tobago Mortgage Finance Company Limited the monthly fee attached to the position of Chairman of the Board of Directors of the Trinidad and Tobago Mortgage Finance Company Limited is $9,000, which comprises a base salary of $8,000 and a travel allowance of $1,000. There are no other financial beneficial considerations attached to the position of chairman. There is no provision for bonus payments for the position of chairman. There have been no bonus payments to the holder of this office from 2006 to present. The National Insurance Board the monthly fee attached to the position of Chairman of the National Insurance Board of Trinidad and Tobago is $10,000. The other financial beneficial consideration attached to the position of chairman is a monthly travelling allowance in the sum of $1,000. There is no provision for bonus payments for the position of chairman. There have been no bonus payments to the holder of this office from 2006 to present. NIPDEC the monthly fee attached to the position of Chairman of the National Insurance Property Development Company Limited (NIPDEC) is $9,000, which comprises an $8,000 director fee and a travelling allowance of $1,000. Additionally, directors fee are applied per board sub-committee meeting attended in the sum of $500 per meeting. From January 2006, to date, the total received by the Chairman for attendance at sub-committee meetings was $4,000, representing attendance at eight meetings. The other financial beneficial consideration attached to the position of chairman is a monthly travelling allowance in the sum of $1,000. There is no provision for bonus payments attached to the position of chairman. There have been no bonus payments to the holder of this office from 2006 to present. Mr. Speaker, I should point out that the salary being paid in the private sector, to persons in similar positions with comparable experience and expertise is in excess of the amount indicated and typically includes additional benefits such as profit sharing. In fact, it is instructive to note that in the private sector, for example, the monthly salary of the CEO of one of the major and well-known construction companies, including perks, was in excess of $200,000 per month. In the case of CEO for banks, it is in the excess of $100,000 per month, excluding perks and other beneficial considerations p.m. Mr. Speaker, Members on the other side are well aware of the rates being paid in the private sector to suitably qualified persons with the necessary level of experience and expertise, especially in the financial sector.

8 300 Oral Answers to Questions Friday, December 18, 2009 [HON. K. NUNEZ-TESHEIRA] Mr. Speaker, as far back as 1999, the gross earnings received by Mr. Vishnu Ramlogan, while he was President of Tidco, for the period , amounted to $3.1 million or an annual average in excess of $1 million. Hon. Members: What? Hon. K. Nunez-Tesheira: Mr. Ramlogan also received fees in respect of his service on a number of state boards including Chairman of First Citizens Bank. The annual fee was $42,000 and travelling allowance was $4,800 per annum. The other state boards on which Mr. Ramlogan served from were: As Deputy Chairman of National Gas Company, he received a fee $15,600 and $2,400 travelling allowance per annum. As Chairman of National Energy Corporation of Trinidad and Tobago Limited, he received a fee of $42,000 and $4,800 travelling allowance per annum. As Chairman of Phoenix Park Gas Processors Limited, he received a fee of $12,000 and $4,800 travelling allowance per annum. As Chairman of First Citizens Holdings limited, he received a fee of $12,000 and $4,800 travelling allowance per annum. As Director of Trinidad and Tobago Export Trading Company Limited, he received a fee of $12,000 and $2,400 travelling allowance per annum. Mr. Speaker, another example is Mr. Donald Baldeosingh, who served as chairman of Petrotrin from February 22, 1996 November 2000, and also sat on a number of state boards during his tenure. As chairman of Petrotrin, Mr. Donald Baldeosingh received a monthly fee of $3,500, an entertainment allowance of $1,500 per month, a company vehicle, housing allowance, credit card and medical insurance. For the period January 2000 to November 2000, the remuneration paid to Mr. Baldeosingh was revised to such an extent that he received a total of $151,946.69, comprising a chairman's fee of $38,500, telephone, including cellular of $31,927.80, entertainment, including credit card of $41, and chauffeur fees of $40,000. The other state boards on which Mr. Baldeosingh served from 1996 were: Trintoc with a director's fee of $11,000 and $4,400 travelling allowance totalling $15,400 per annum. That was in Trintopec with a director's fee of $11,000 and $4,400 travelling allowance totalling $15,400 per annum.

9 301 Oral Answers to Questions Friday, December 18, 2009 Trinserv with a director's fee of $11,000 and $4,400 travelling allowance totalling $15,400 per annum. Trintomar with a director's fee of $14, per annum. Mr. Speaker, when the position of executive chairman was created in 2006, Cabinet agreed that the terms of employment of the holder of the office be determined by the Public Sector Negotiating Committee (PSNC). One of the terms agreed by the PSNC was that the holder of the office would be entitled to annual bonus payments ranging from ½ to 3 months salary, based on the achievement of organizational targets. Mr. Speaker, it is to be noted that the holder of the position of Executive Chairman in UDeCOTT has served in that position since 2006, and notwithstanding the contract terms set by the PSNC regarding the payment of annual bonuses, it is to be noted that in 2006, no bonus payments were made; in 2007, no bonus payments were made; in 2008, no bonus payments were made; and in September 2009 a payment of net $95,625was made representing a bonus payment of 1½ month's salary for the year September 01, 2006 August 31, With respect to UDeCOTT, as I indicated previously, the post of executive chairman was first introduced in August The contract of the Executive Chairman of UDeCOTT was renewed in September Finally, the changes are as follows: The basic salary was increased by $5,000 per month and the housing allowance was increased by $1,000 per month. Mr. Speaker, thank you. Dr. Moonilal: Mr. Speaker, thank you very much. Madam Minister, thank you for the information on Mr. Baldeosingh and Mr. Ramlogan and so on, but would you also be able to tell us how much one Karen Tesheira made on the board of Tidco? [The Minister stands] Mr. Speaker: Take your seat please. You can sit down. Further supplemental. Dr. Gopeesingh: Could the hon. Minister confirm or deny whether Mr. Malcolm Jones from Petrotrin was receiving over $100,000 and Errol Grimes more than Mr. Speaker: Likewise, you need not answer. Are there any further supplemental? [Interruption]

10 302 Oral Answers to Questions Friday, December 18, 2009 Purchase of Marine Vessel (Details of) 111. Mr. Winston Peters (Mayaro) asked the hon. Minister of Sport and Youth Affairs: Could the Minister state whether or not the Ministry of Sport and Youth Affairs has purchased a marine vessel? B. If the answer to (A) is in the affirmative, please state: i) the purpose for which this vessel will be used; ii) the cost of the vessel; iii) the name of the supplier of the vessel; iv) the recurrent cost associated with the maintenance of the vessel; v) the process for the procurement of this marine vessel? The Minister of Sport and Youth Affairs (Hon. Gary Hunt): Mr. Speaker, the Ministry of Sport and Youth Affairs has not purchased a marine vessel. The Trinidad and Tobago Power Boats Association (TTPBA) is a national sporting organization registered with the Ministry of Sport and Youth Affairs since In fiscal 2006, it was granted funds in the sum of $216,384 as its annual subvention. The TTPBA has advised that part of the funds was utilized to purchase a marshal s safety vessel and safety equipment. The TTPBA, on its own volition, affixed a sign on the vessel which says: Courtesy of the Ministry of Sport and Youth Affairs. Mr. Speaker, in light of the answer to part A of the question, part B is not applicable. COMMITTEE OF PRIVILEGES (APPOINTMENT OF TEMPORARY MEMBER) The Minister of Works and Transport (Hon. Colm Imbert): Mr. Speaker, having regard to your decision to recuse yourself from the deliberations on a matter currently before the Committee of Privileges namely, the inaccurate and/or distorted reporting of the proceedings of the House of Representatives involving Caribbean Communications Network Limited TV6, I beg to move that in accordance with Standing Order 90(1) that this House agree to suspend Standing Order 75(2) which states: The Speaker shall be a Member, and the Chairman, of the Committee of Privileges.

11 303 Committee of Privileges Friday, December 18, 2009 Question put and agreed to. Hon. C. Imbert: Mr. Speaker, I further beg to move that Miss Pennelope Beckles, Deputy Speaker, be appointed as chairman of the Committee of Privileges for the matter involving Caribbean Communications Network Limited TV6 only, and that the House agree to appoint hon. Kennedy Swaratsingh, Member for St. Joseph, as a temporary Member of the Committee of Privileges to replace the hon. Barendra Sinanan, Speaker of the House, during consideration of this particular matter. Question put and agreed to. Order for second reading read. PROPERTY TAX BILL The Minister of Finance (Hon. Karen Nunez-Tesheira): Mr. Speaker, I beg to move, That a Bill to make provision for the assessment, rating and taxation of land and for matters incidental thereto, be now read a second time. Mr. Speaker, in moving the second reading of this Bill, I seek the leave of the House to debate together with this Bill, the Valuation of Land Act, Chap. 58:03 and to validate certain actions of the Commissioner of Valuation. Agreed to. Hon. K. Nunez-Tesheira: Mr. Speaker, I wish to move that the following Bills standing in my name be read together, as agreed, since they contain substantially the same provisions on a complementary of each other in the valuation and tax assessment of properties in Trinidad and Tobago; that is the Property Tax Bill of 2009 and the Valuation of Land (Amdt.) Bill, Mr. Speaker, the Bill before this House would bring into operation, with effect from January 01, 2010, the new reformed measures governing the taxation of properties in Trinidad and Tobago. The Lands and Buildings Taxes Act, Chap. 76:04 and Part V of the Municipal Corporations Act, Chap. 25:04 will be repealed and replaced with this new legislation. Neither the Property Tax Bill nor the amendment to the Valuation of Land Act require the support of a special majority of either House of Parliament, since pursuant to section 6 of the Constitution, the new law contains provisions which do not derogate from any fundamental right to an extent which the existing law did not previously derogate. In other words, the provisions of this Bill have

12 304 [HON. K. NUNEZ-TESHEIRA] been saved under the Constitution Mr. Speaker, as I indicated in the 2009 budget statement on September 22, 2008, and I quote: The Government is committed to making the tax administration system as efficient and user-friendly as possible. Part of the tax reform initiative is the reform of our property tax regime which is antiquated, inefficient and lacking in equity. I also indicated on the same date that is September 22, 2008, that the proposed new tax regime would take effect from January 01, To this end, we have engaged in a comprehensive communication strategy which commenced in September 2009, aimed at sensitizing the population to the new measures to be implemented and the effects on taxpayers. Some examples of the media used in the communications campaign were meetings and presentations to various associations including the Trinidad and Tobago Manufacturers Association, the Trinidad and Tobago Chamber of Industry and Commerce and non-governmental organizations such as the Inter-Religious Organization and the Trinidad and Tobago Association of Retired Persons. Public meetings were held in areas such as Sangre Grande, Mayaro, Diego Martin, San Fernando, Tunapuna, Penal and Debe. Advertisements were placed in the newspapers and on radio and television. Ministry of Finance personnel made appearance on television talk-show programmes over the period September November, Brochures were distributed through TTPost to 226,000 households in Trinidad and Tobago, and were also available at district revenue offices. A hotline was also established to answer concerns of citizens on the property tax system. Mr. Speaker, the Property Tax Bill is intended to give effect to the reform of the administration of property taxes, part of a wider Government institutional reform for our nation. This Bill signals the implementation of a modern and efficient system for the valuation and assessment of properties for the purposes of taxation. Mr. Speaker, in the real estate appraisal sector, property taxes may be calculated using the capital value or the rental value method. The rental value method is adopted in many countries as the preferred method of appraisal, because there is more evidence of the rental value of property and less evidence on the value of the sale of properties, that is, less evidence of the capital value p.m. This is the case with Trinidad and Tobago where, in every area of the country there are properties in rental occupation. However, there are several pockets of the country where sale transactions or capital value transactions are over two years apart.

13 305 The Government Revenue Management Software, the new property tax software can, however, accommodate the switch from rental value to capital value as a basis for calculating the property tax if a decision is made in the future to apply this method of appraisal. Mr. Speaker, there are several distinct features of the new property tax reform. First, it addresses the inequities in the current system. Under the current system there are a number of inequities which have arisen as a result of a non-revaluation of properties. These inequities, produced by variations in tax liabilities, are more than 100 per cent for similar residential buildings. For example, a building constructed in 1970 may attract a tax liability of 96 cents under the Lands and Buildings Taxes Act of 1920; whereas, today, a similar building in the same locality as a result of revaluation by the Commissioner of Valuations over the years may attract a tax liability of $284 under the same Lands and Buildings Taxes Act. These inequities are even more prevalent in the boroughs and cities under the Municipal Corporations Act of 1990, where similar residential buildings are charged different rates of tax on the annual taxable rate. For example, Point Fortin properties attract a rate of 2 per cent; San Fernando, 8 per cent; Chaguanas, 10 per cent and Port of Spain, 10 per cent. In addition, persons who have constructed buildings without applying for a mortgage and are currently under the land and building system still pay $10 for the land only since the buildings are not on the assessment rolls. Similarly, people who have extended their homes to, perhaps, twice the original size after an assessment has been carried out are still paying the original tax liability since they have not been reassessed. Mr. Speaker, one may well ask, how did this situation arise? In this context it is instructive to review some basic concepts. The property tax on a lot of land is derived by finding the annual rental value of the parcel of land which would include any building, plant and machinery on the land. This is termed, the valuation exercise. Thereafter, the relevant rate of tax is applied to the annual taxable rate found. This is termed, the assessment of tax exercise. Currently in Trinidad and Tobago the tax assessment component is governed by different pieces of legislation, resulting in two different systems of tax assessment. This has resulted in two major deficiencies. First, the property tax administration is not as efficient as it could be, and second, there is a lack of equity in the treatment of taxpayers. I will explain: The valuation of property in the nine regional corporations and Tobago is still governed by the Lands and Buildings Taxes Act of 1920 and for properties in these areas, the last global determination of property values was conducted in In the municipal corporations

14 306 [HON. K. NUNEZ-TESHEIRA] which are governed by the municipal corporations legislation, more recent valuations were done between 1975, in the case of Port of Spain; 2004, in the case of San Fernando and 2008, in the case of Point Fortin. The valuation for properties for the whole of Trinidad and Tobago is outdated and the list of assessed properties is incomplete. The valuing of properties has been no easy task. Each corporation has had to rely on Valuation Division of the Ministry of Finance, and trained staff to hire specialist staff, valuators and information technology software specialists to conduct these affairs. Quite apart from the very significant disparities in the valuation dates, there is also a significant difference in the assessed tax rates applied. Mr. Speaker, in the case of the nine regional corporations, that is Diego Martin, San Juan/Laventille, Tunapuna/Piarco, Sangre Grande, Couva/Tabaquite/Talparo, Siparia, Debe/Penal, Princes Town, Rio Claro/Mayaro and Tobago, the Board of Inland Revenue applies the Lands and Buildings Taxes Act of 1920 to collect property taxes. The property taxes are currently charged as follows: A flat tax rate on the land and a rental rate on each building independent of location; in respect of land zero to 10 acres, $10 per acre; 11 to 100 acres, $15 per acre; over 100 acres, $20 per acre. With regard to the building, the tax is fixed at 7½ per cent of the annual ratable value, that is the annual rental value. For industrial properties, the rate is fixed at 6 per cent of the installed cost of the plant and machinery and associated buildings. As I said before, properties located in the nine regional corporations and Tobago pay a rate of tax between $10 and $25 per acre of land with a 7½ per cent tax on the annual rental value of the building of the building, with the last assessment dating from [Interruption] Mr. Speaker: Order! Hon. K. Nunez-Tesheira: The two cities, Port of Spain and San Fernando and the three boroughs of Chaguanas, Arima and Point Fortin, collect property taxes or house rates as they are called under the Municipal Corporations Act of Under this Act, property tax rates for residential, commercial, industrial and agricultural lands range from 10 per cent in Port of Spain to 2 per cent in Point Fortin. What that means, is that you can have similarly constructed houses within a relatively small geographic location, paying rates or property tax simply because one falls within the boundary of a municipality and the other comes under the jurisdiction of a regional corporation I should say paying different rates of property tax. The Property Tax Bill will address this inequity by unifying taxes across the board regardless of the location of the property.

15 307 The taxes will fall into four categories or properties based on usage: For residential, the rate as announced in the 2010 budget of this Government will be 3 per cent of the annual taxable value; the commercial will be 5 per cent; agricultural 1 per cent and industrial 6 per cent. A second protocol feature of the property tax reform exercise as indicated earlier is the adoption of a property tax appraisal system based on the rental value or appraisal method used under the Municipal Corporations Act. This method of calculating taxes is modern and suitable for Trinidad and Tobago and was arrived at after substantial consultation with valuators and experts in the field. Annual ratable and annual taxable values are synonyms and for greater clarity annual taxable value will be used in the new Property Tax Bill. Although the rate of 3 per cent is far below 7½ per cent applicable under the Lands and Buildings Taxes and the average of 8 per cent under the Municipal Corporations Act, most properties with the notable exception of Point Fortin in 2008 and San Fernando in 2004 have not been recently appraised. As a result the rate of tax is applied to an old valuation. In other words, the more recent valuation of property will yield a higher value, and consequently when the tax rate is applied it will result in a higher quantum of tax payable. It is on understanding of this a decision was made to lower the rate of tax to be applied to 3 per cent across the board. Mr. Speaker, the third reform initiative of the new property tax measures is the establishment of a single tax assessment and collection agency, that is the Board of Inland Revenue. The specialized task of valuing all properties should be conducted by one agency applying the same principles for the entire country. The consequential amendments to the Valuation of Land Act will provide Trinidad and Tobago with a single agency for the determination of property values for the purposes of taxation. The Tax Administration and Collection Agency will be the Board of Inland Revenue and will be empowered to assess taxes based upon valuations of properties assessed by the Valuation Division. There will no longer be several agencies throughout Trinidad and Tobago employing time, effort and resources for the task of determining property values and assessing taxes. Trinidad and Tobago will benefit from economies of scale as the required software purchase and maintenance will be the responsibility of the Valuation Division for the valuation part of the exercise and of the Inland Revenue Division for the tax assessment part of the exercise.

16 308 [HON. K. NUNEZ-TESHEIRA] Mr. Speaker, the fourth major initiative of the property tax reform is the implementation of the proposed new property tax information system. The property tax information system will improve and streamline the systems of assessment, management and collection of property taxes throughout the country through the Valuation Division and the Board of Inland Revenue of the Ministry of Finance, and eventually, the Trinidad and Tobago Revenue Authority. These features include the following: it will use information technology to implement a modern and efficient property tax system resulting in a virtually paperless transaction; it will provide a uniform information system for the management of property throughout the country. The new system will facilitate the efficient determination and collection of property taxes and other charges; it will provide the citizenry with a reasonable up-to-date reference map; it will homogenize the property tax system throughout the country making assessment and collection more efficient, transparent and user-friendly. The system will interface with the surveys and mapping division of the Ministry of Agriculture, Land and Marine Resources to get information on parcel index, maps, roads and buildings in Trinidad and Tobago associated with each hereditament or property; and it will interface with the Town and Country Planning Division of the Ministry of Planning, Housing and the Environment to get land use, planning and development information for each property. A fifth initiative of the property tax reform is the creation of a modernized payment system. Currently, what is required to make payment of one's property takes in the borough, city or district revenue office where the property is located. Under this new system property owners can now pay their taxes at banks, TTPost, 15 district revenue offices in practically the same way that they pay their T&TEC and WASA bills. So, for example, if you live in San Fernando but own property in Port of Spain currently you have to go to the Port of Spain office to pay the taxes. This inconvenience will now be a thing of the past. In addition, under the new system, the Property Tax bill will be mailed to all property owners much in the same way as you get your electricity or water bill. The bill will be sent by mail by March 31st of each year. As you know, Mr. Speaker, currently you have to go into the district revenue office to find out your tax liability.

17 309 The sixth initiative of the property tax system will allow for prepayments and part payments thus enabling taxpayers to pay their property taxes in instalments. Under the present system taxpayers are required to pay the whole amount of the tax annually. A seventh significant initiative of the new property tax system is the provision of the deferral of the payment of property taxes on the grounds of financial hardship as set out in clause 23 of the Bill. This allows for persons who are in receipt of certain public grants the public assistance grant, the disability grant, the Senior Citizens Grant or the Trinidad and Tobago Conditional Cash Transfer Card from the State as well as those who do not receive an annual income exceeding the maximum amount specified under the Senior Citizens Grant Act to apply for a deferral of their property tax obligations. Under the current system there is absolutely no provision for deferral of taxes on the ground of financial hardship. It should be pointed out that the Government has put measures in place to ensure that customer bills from the Water and Sewerage Authority are not affected by the new annual taxable rate. The Property Tax Bill repeals and replaces the Lands and Buildings Taxes Act, 76:04 and Part V of the Municipal Corporations Act. Although the Bill contains a number of new provisions it is not complex in nature. I wish to draw the attention of Members to the following main provisions. The Bill contains seven parts and 57 clauses. Part I of the Bill contains four clauses and provides for preliminary provisions. Clause 1 of the Bill provides for the short title of the Act for which this is the Bill. Clause 2 provides for the commencement of the Act, that is January 01, Clause 3 provides for the interpretation of certain words and phrases using the Bill. Clause 4 provides that the Act would bind the State. Part II of the Bill contains five clauses and provides for the creation and maintenance of the assessment roll. Clause 5 of the Bill would provide for the establishment of a roll to be known as the assessment roll which sets out the tax assessed on a particular property based on a valuation done by the valuation division. Clause 6 of the Bill would provide for the contents of the assessment roll. It recognizes the nexus between the assessment roll under this Act and the valuation roll under the Valuation of Land Act and the application of deductions and allowances.

18 310 [HON. K. NUNEZ-TESHEIRA] 2.15 p.m. Clause 7 of the Bill would provide that production of an extract of the assessment roll may be used as sufficient evidence of the making and validity of valuations and annual tax return therein. Clause 8 would allow for errors on the assessment roll to not vitiate any assessment of tax or affect in any way the tax liability of an owner. Clause 9 would prescribe land not on an assessment roll would still be liable to assessment. Part III of the Bill contains 12 clauses and provides for the assessment of land under the Act. Clause 10 would provide for the raising, levying and collecting of taxes on all land. Clause 11 would provide that the annual taxable value of land should be payable in accordance with the First Schedule. Clause 12 would require that the valuation roll be used for the purposes of assessment of taxes of land under this Act. Clause 13 of the Bill would provide for the calculation of the annual taxable value clause. Clause 14 would empower the Board to make deductions and allowances in respect of voids resulting in loss of rental equivalent to 10 per cent of the rental value. The clause goes on to empower the Minister to amend the percentage by Order, such Order being subject to affirmative resolution of Parliament. Clause 15 would deem the owner of land liable to taxes assessed under this Act. Clause 16 would set out the category of land which is exempted from taxation under this Act. The clause is quite wide and expands the existing list of exemptions as follows: land used exclusively as a church or churchyard, and every cemetery or burial ground that is enclosed and actually require used and occupied for the interment of the dead, but not land that is rented or leased by a church or religious organization to a person other than another church or religious organization; school buildings, offices and playgrounds of schools within the meaning of the Education Act are exempt; lands attached to, or otherwise actually used in connection with and for the purposes of a place of learning maintained for educational, philanthropic or

19 311 religious purposes, the whole profits from which are devoted or applied to such purposes; are exempt; land owned, occupied and used exclusively by an incorporated charitable institution; is exempt; land of a designated class that is declared by the Minister of Finance to be exempt wholly or partially from taxation under this Act; land belonging to and in occupation of the State or its servants for public purposes is exempt; land used for the purposes of public hospitals, public asylums and all almshouses and institutions for the relief of the poor, whether publicly or privately administered; are exempt; lands belonging to and occupied by the University of the West Indies or its servants; land belonging to and occupied by the Council of Legal Education; land owned or occupied by a foreign government or international organization of which Trinidad and Tobago is a member; land belonging to a tertiary learning institution owned or managed by the State; land belonging to the University of Trinidad and Tobago; and land belonging to the College of Science, Technology and Applied Arts, (COSTAATT). is exempt. Mr. Speaker, paragraphs (k), (l) and (m), the last three, are the new exemptions. At the committee stage, I will propose the inclusion of another exemption at paragraph (n) in respect of land belonging to the University of the Southern Caribbean. Clause 17 of the Bill will require the board to cause a notice of assessment to be served on, or delivered to, the owner or occupier of land. The clause goes on to provide for the method of service of a notice and the contents of the notice. Clause 18 would allow for the liability to pay tax to be not affected by inaccurate or incomplete assessments, absence of assessments, errors of form of description. Clause 19 would provide for where there is an omission from the assessment roll and for where construction is completed after the completion of an assessment roll. The clause would make provision in such circumstances for the proration of the taxes assessed under this Act.

20 312 [HON. K. NUNEZ-TESHEIRA] Clause 20 would require the board to notify the Commissioner of Valuations of any alterations in respect of land so that such changes could be recorded accordingly in the assessment roll by the board and in the valuation roll by the Commissioner. Part IV of the Bill would contain 10 clauses and set out the procedure, objections, relief, revaluation and appeals under the Act. Clause 21 of the Bill prescribes the procedure to file objections to assessments. Clause 22 of the Bill details the grounds for objections to an assessment. These objections to assessment may be made on the following grounds: (a) (b) (c) (d) (e) (f) (g) that the annual rental value of any land appearing in the Valuation Roll is incorrect or unfair having regard to other annual rental values therein; that land should not have been included in the Valuation Roll; that land omitted from the Valuation Roll should be included therein; that land included in a series or complex of land units as a single land on the Valuation Roll should be listed separately on the Valuation Roll or omitted therefrom; that land listed separately in or omitted from the Valuation Roll should be combined with one or more of a series or complex of land units and listed as one single unit of land; the assessed tax is incorrect; and that the Valuation Roll is incorrect in some other material particular. Clause 23 of the Bill allows for persons who are in receipt of certain public grants: public assistance grant, the disability grant, senior citizens grant or the Trinidad and Tobago conditional cash transfer card from the State, as well as those who do not receive an annual income exceeding the maximum amount specified under the Senior Citizens Grant Act to apply for deferral of their property tax obligations. Clause 24 of the Bill would require an applicant to adduce proof of necessity for relief. Clause 25 would empower the board to set out conditions in respect of any grant of relief. Clause 26 would empower the board to vary or revoke authorization for deferral of the taxes assessed under this Act. Clause 27 of the Bill provides for any period of deferment of the payment of taxes assessed and owing under the Act to cease on the death of an owner.

21 313 Where, however, a successor entitled, that is, the person who has inherited the property is unable to pay the tax, the board may recommend that the President authorize the total or partial exemption of the tax payable up to the death of the deceased owner. Clause 28 of the Bill would create an offence for false statements in application for relief which is punishable on summary conviction by a fine of $5,000. Clause 29 of the Bill would entitle a person aggrieved from a decision of the board to appeal to the Tax Appeal Board. Clause 30 of the Bill would require that any variation or alteration be entered in the assessment roll. Part V of the Bill would contain 16 clauses and provide for the recovery of taxes. Mr. Speaker, it is important to note that Part V of the Bill which sets out the provisions of the recovery of taxes is not new. Indeed, the provisions for recovery by way of distress or forfeiture are provisions that exist in the current legislation. The main changes that we have introduced are to extend the periods for the initiation for the recovery of taxes. For example, Mr. Speaker, we have extended the period for distress proceedings from three months to one year. In respect of forfeiture, the period is extended from one year to five years and in respect of unoccupied and un-assessed lands from five years to 16 years. Mr. Speaker, it should be noted that these forfeiture measures are included in all jurisdictions which implement property taxes, including the United Kingdom. Clause 31 of the Bill would require that rented land and land with machinery and plant be taken into account in the assessment of tax and would allow the owner to recover from the tenant as a civil debt any increase in tax which he may have incurred as a result of the presence of machinery or plant. Clause 32 would provide that any unpaid taxes assessed under this Act would become a charge on the land to which it relates. Clause 33 would provide for when assessed taxes become due for payment. Clause 34 would require the board to send a notice by registered post to the owner of land who fails to pay the tax assessed and due under this Act by September 15, 2009, informing him that from that day penalties for non-payment of taxes would apply and failure to pay the tax and interest may result in his property being forfeited.

22 314 [HON. K. NUNEZ-TESHEIRA] This clause goes on to provide for the amount of interest according to certain time frames and for the application of interest in respect of old sums and in certain instances for the forfeiture of land. Clause 35 of the Bill would provide for liquidation of any arrears. Clause 36 of the Bill would require the board to send a notice of demand by registered post to the owner of land who fails to pay the tax assessed and due under this Act within six months of becoming due and owing. Clause 37 would provide for the distrain of the goods or chattels of the owner, occupier or tenant of the land for failure to pay sums due and owing under this Act. Mr. Speaker, I wish to point out that under the existing law, the taxing authority is empowered to levy disstress on goods where there is failure to pay the outstanding sum more than three months after they are due and owing. As I indicated, it is proposed to extend that period for one year. Clause 38 of the Bill would provide that where goods and chattels are restrained under the Act, such restraint would be at the cost of the owner. Clause 39 of the Bill would prescribe the procedure for distress of goods. Clause 40 of the Bill would preclude a landowner from levying distress in respect of lands on which arrears of tax are owed. Clause 41 of the Bill provides for the circumstances in which the President may issue a warrant for forfeiture. Tax on the lands must be in arrears and unpaid for a period of five years from the current one year after the tax became due and payable in order for forfeiture to take place. This change will be discussed at the committee stage with your leave. Clause 42 of the Bill would require the board to register with the Registrar General any warrant of forfeiture. Clause 43 would provide for the registered warrant to be used as conclusive evidence in proceedings regarding title to lands. Clause 44 would treat forfeited land as vacant, waste or state lands. Clause 45 would render land unoccupied and un-assessed for 16 years liable to forfeiture. The current period is five years. This change will be discussed at committee stage. Clause 46 would provide for a re-grant of land forfeited where the President thinks fit. Clause 47 of the Bill would provide for the prosecution of offences under the Act.

23 315 Clause 48 will provide for the vesting of estates, rights and powers of the Commissioner of State lands upon his death in a successor in office. Clause 49 of the Bill prescribes the penalty for obstructing an authorized officer. Part VI of the Bill would contain two clauses and provides for third party payments to the board. Mr. Speaker, it is our respectful view that these provisions epitomize the reform of the Property Tax system. Clause 50 of the Bill would authorize persons to make payments of sums due and owing under this Act to the board through a third party payment agency prescribed by order of the Minister. The third party payment agencies are then required to forward the sums paid to the board on behalf of the owner of the land. These third party agencies will include banks, post offices, WASA and Trinidad and Tobago Electricity Commission (T&TEC). Clause 51 of the Bill would empower the Board, notwithstanding any other law, to accept payments by any means from third party payment agencies. Part VII of the Bill would contain five clauses and provide for miscellaneous provisions of the Bill. Clause 52 of the Bill would empower the Minister to extend the time frames prescribed by the Act. Clause 53 would empower the Minister to make regulations. Clause 54 would require that upon coming into force of the Act, all payments due and owing for property taxes under the Lands and Buildings Taxes Act and Part V of the Municipal Corporations Act shall remain due and owing and be treated as if they were due and owing under this Act. Clause 55 would repeal Part V of the Municipal Corporations Act and clauses 56 and 57would repeal the Lands and Buildings Taxes Act and the Tax Exemption Act, respectively. Schedule I of the Bill will prescribe the calculation for determining the percentages for annual rental value. Schedule II of the Bill will set out the forms to be used for the issue of a distress warrant. Schedule III of the Bill would set out the form to be used for a warrant of possession.