It is meant as a major revenue-earning measure for Government and one that will put millions of dollars into the Treasury.
But Opposition Leader Mia Mottley today issued a stern warning to the Freundel Stuart administration that it could end up losing more money than it makes from the collection of the Municipal Solid Waste Tax.
Speaking to reporters at a press briefing at the Opposition’s Office, Mottley, who was strongly backed up in her argument by fellow lawyer and Opposition MP Edmund Hinkson, said a stipulation by the Barbados Revenue Authority (BRA) that the municipal tax must be paid in full before a land tax certificate is issued to a property owner could result in the loss of 10 per cent of the expected revenue to the Treasury.
“As everyone would know there are several lawyers who at this time would be processing documents for the transfer and sale of properties for clients. With this new stipulation, Government is holding out for the 0.3 per cent Municipal Solid Waste Tax, but losing 3.5 per cent in Stamp Duty and Property Transfer Tax or almost 10 more in taxes in a land transactions,” explained Mottley.
“It is a decision of a confused mind,” she added.
Expanding on Mottley’s observation, Hinkson, who is the parliamentary representative for St James North, said:
“The major and immediate direct implication of this stance is that no sale or other transfer of property in Barbados can be completed until the Municipal Solid Waste Tax has been paid, since under the Land Tax Act, the Registrar of Titles can only stamp and record the document of sale or transfer if a valid land tax certificate is produced.
“The BRA is clearly acting ultra vires in law by taking this policy decision,” Hinkson charged.
“Municipal Solid Waste Tax, unlike land tax, is not a first charge by statute on the land in respect of which it is being levied. It is not a lien or encumbrance on any property. The Municipal Solid Waste Tax Act has not given the BRA the legal power to adopt this position which it has taken. The BRA cannot act on its own whim and fancy outside of the laws as enacted by the Parliament of this country,” he added.
Hinkson, who is a practising attorney-at-law, further argued that “the policy decision, until reversed, will in fact deprive the Government of hundreds of thousands of dollars in stamp duty and vendors property transfer tax which are both payable at the combined rate of 3.5 per cent of the purchase price or value of the property on its transfer.”
He contended that as Minister of Finance, Chris Sinckler should have given written directions to the BRA indicating that it has no legal power to adopt such a policy that is so contrary to and in breach of the existing Laws of Barbados.
Hinkson also warned that the could face legal action if it does not reverse its stance in the very near future.
The St James North MP dismissed also claims made by Sinckler that the Municipal Solid Waste Tax has to gain parliamentary approval to be extended beyond one year, pointing out that he could either lower or raise the percentage rate without parliamentary approval.
He called on Sinckler to repeal the Act, a decison which he claimed the Opposition would readily agree to at the next sitting of the House of Assembly on Tuesday.
nevilleclarke@barbadostoday.com