Dear Editor,
We thank Roger Ally for his letter in the media. Firstly, we do not subscribe to a withdrawal of the concept of a “Taj Mahal” tax or find it perverse. Actually in the interest of transparency, we see no difficulty in increasing the cap from G$20 million to G$25 million to further refine the sub-set of property owners that such a tax is designed for – the well-to-do upper class. Therefore we encourage the majority opposition to seek the inclusion of this idea of a Taj Mahal Tax on the agenda of the Clifford Reis Tax Reform Commission appointed by His Excellency the President.
Currently in Guyana, property worth above G$12.5 million is liable for Property Tax of 0.75%. So we are not advocating for a new Tax that is not already on the books. What we are advocating is the insertion of a new scale to capture those Taj Mahals built by people who clearly can afford to pay taxes. The overwhelming majority of Guyanese own homes valued at less than G$25 million, so we remain unsure as to the basis of the reasoning put forward by Mr. Ally. In this letter we attempt to address them as carefully as we can.
As the gap between the rich and the poor widen to the widest divide ever in the history of the Republic, it is important that those who were fortunate to have earned more from this nation develop an attitude to paying more. That is the foundation of good tax ethics the world over. Tax payment should always be driven by the ability to pay.
Mr. Ally did not provide any basis for his conclusion that “to tax homes that exceed G$20 million is counterproductive”. What is the basis of such a conclusion? On the law books of Guyana – all property worth more than G$7.5 million is already eligible for Property Tax. Isn’t it counterproductive to tax a family who owns a home worth G$7.5 million? There are many in this bracket who can barely afford to upkeep their home? What would be very productive is if the bottom bracket (G$7.5 million to G$12.5 million) in the Property Tax regime becomes tax exempt, removing thousands of Guyanese families who can only just afford their home. Of course we are extremely fiscally responsible people. We would not recommend a tax hole without finding a replacement tax. The tax gap created by removing the bottom of the Property Tax bracket from taxation will be filled almost four times over by the Taj Mahal Tax.
Secondly, Mr. Ally recommends, that the nation “must aspire to create new homes and neighbourhoods that are spectacular”. A most commendable statement but with the rights to a spectacular neigbourhood come the responsibility to aspire to pay the appropriate tax.
Similarly we find Mr. Ally’s argument without merit when he claimed that families will “neglect the exterior of their home to give the impression that their property is valued less than the threshold”. We are shocked with this statement that mis-characterizes the well-to-do in Guyana. We have never met a Guyanese family who can afford a G$25 million home with such a narrow mindset.
Mr. Ally has chosen to be most misleading with reality in the real estate sector in Guyana. It is not reality that a G$15 million house in Guyana can be considered as a “sprawling slum” as defined by Mr. Ally.
The last time we checked with our experts, in Guyana a decent two storey-three bedroom house cost on average G$9 million -G$10 million. So we remain unsure of which real estate engineer Mr. Ally has consulted in arriving at this description of what is a slum house and what is not.
We respectfully thank Mr. Ally for his comments but beg to disagree with his prognosis. We take this opportunity to seek from His Excellency the President, a progress report on the status of his appointed Clifford Reis Tax Reform Commission. The work of that Commission will go a far way in comprehensively reforming a mal-functional tax regime.
As Franklin Delano Roosevelt said “Taxes shall be levied according to the ability to pay”. It is time the well-to-do pay a fairer share of the tax bill.
Yours faithfully,
Dr Asquith Rose and Harish S. Singh
