The Grenada Senate has given approval to the Property Tax Amendment bill which seeks to amend the Property Transfer tax.
During its passage at a recent Senate sitting at the Grenada Trade Centre, Tourism Minister, Senator Brenda Hood said Government sees this bill as a positive one since it can help to increase the investment climate on the island.
According to the female government minister, the first amendment will affect property that has to be transferred in the form of deed of gifts.
Sen. Hood said there has always been some concern about how to apply tax exemption for such transfers.
“We know that there have been a lot of issues in the past regarding this concern and at times the Government has not received the finances (with) the Deeds transfer – what we are trying to do at this time is to regularise it”, she told the Senate sitting.
“…The insertion of subsection five therefore, clarifies that these exemptions (apply) only once per transfer. Regardless as to whether there are a number of transfers or a number of transactions relating to a piece of property, the transfer is considered a single transfer to determine the excess value of a property. This we are regularising,” she said.
Another issue dealt with in the amendment concerns the issue of property purchased by a non-resident investor for developmental purposes.
Sen. Hood said Government is now seeking to make it clear that an investor must commence his project within two years of the purchase of such lands.
“We have seen in the past where we have given incentives to investors and many of the times, it goes on and on and on. This time, this will not be. We are giving a time frame of two years of the purchase of the land and if this is not done within the time period, then the property tax waived must be repaid”, she added.
It is the hope of government, according to Sen. Hood that this amendment will encourage investors to start their projects in a timely manner.
“This has been a concern for us here and I believe by putting this in place, we will see projects coming on stream at the time that they say they could. If they’re not they have to refund whatever was given to them,” she said.
There was general support for the bill but a few Senators raised their concerns on some aspect.
Senator Christopher De Allie said the private sector supports the bill but felt that a lot of loopholes were spotted and need to be closed as this would allow Government to better administrate the Transfer Tax.
Sen. DeAllie touched on one aspect of the amended bill that was bothering him.
He said: “Where it (the bill) speaks to being not a citizen, I wonder how the section that deals with being not a citizen reconciles with the CSME rules that deals with our CARICOM brothers and sisters. How do those sections reconcile with that and do they need special consideration because you charging a differential tax for being a citizen versus not being a citizen – under CSME rules that may not be allowed,” he said.
Opposition Senator, Nazim Burke of the main opposition National Democratic Congress (NDC) echoed the same sentiments as Sen. DeAllie.
Trade union representative in the Upper House, Sen. Ray Roberts said that he welcomed any opportunity that will create jobs for the people since too many persons on the island are unemployed and underemployed.
“I certainly welcome the one that gives the investor two years. I think it’s an excellent idea. It means that we must have boots on the ground and give us the assurance…”, he said.
“… We hope that is the case with the two billon dollar project… we hope it’s not another dream but clearly it’s a good piece of legislation which stipulates, if you here for real, you should do something real”, he added.
Sen. Roberts was obviously referring to the two billion dollar project announced by government for Mt. Hartman involving a Chinese investor.
Several former New National Party (NNP) administrations led by Prime Minister Dr. Keith Mitchell have announced major hotel projects for the area that never materialized.
In the build up to the 2003 general elections, a tractor started excavation work at Mt. Hartman for the much-talked about RitzCarlton hotel project but halted after a mere weeks on the site.
Sen. Roberts dropped hints that the amendments made to the Land Transfer tax are seemingly aimed at those persons seeking to purchase Grenadian passports under a government-promoted scheme to attract revenue.
“…We somehow believe that much of the amendments that you have come up with here, seems to favour citizenship by investment, real estate tourism speculators,” he remarked.
The cash-strapped Mitchell-led government is on the hunt for millions of dollars to be used as counterpart financing to get a number of promised projects off the ground to try and ease the unemployment situation in the country.