Economist warns of backlash from property tax

Senior economist Dr. Dhanaysar Mahabir believes the new property tax that takes effect at the beginning of 2010 will create a severe backlash against the manning administration in Trinidad and Tobago.

Speaking on national television Monday night Mahabir said citizens already feel the strain of a depressed economy and the new tax will only add to their burden. And he questioned the government's motive in introducing the tax regime.

He said the authorities have not clearly explained why the government is imposing this tax on citizens.

"It is simply a tax that is levied on owners of wealth without any benefit accruing directing to the owners of wealth. And that is going to create a great deal of resentment because the owners of property, which might be the only wealth many people may have, would have already paid taxes on their income," he said.

He explained that there would be resentment to the additional tax burden because citizens are already heavily taxed on everything from direct income taxes to valued added taxes on consumer goods.

Mahabir also predicted that there is no sign of a healthy economic outlook for 2010, suggesting that there will continue to a decline in state revenues.

"We are going to see across the board reductions in incomes and reductions in employment. The only benefit is that we are going to observe some stabilisation in the price level and the economy therefore is really going to slow even further in 2010," he said.

The economist also warned about plans for the government to help Jamaica get through its financial trouble by investing in the state-owned Air Jamaica.

He suggested that the government operate on the principle that charity begins at home.

"Trinidad and Tobago is in a situation where it needs all the finances it can garner to run its own affairs...(the country) is best advised to use all the funds it could obtain to really ensure that it could prevent its own economy from collapsing in a disastrous way," he said.