Moves afoot to address non-payment of non-citizens’ land holding tax

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Amendments to the Non-Citizen Land Holding Regulation Act are being considered to fix what the government says are loopholes that are preventing the state from getting more money when land is sold to non-citizens.
According Melford Nicholas, information minister, the problem is that lawyers are “exploiting” a section of the law to allow non-citizens to avoid paying what is legally required and instead pay a fee of only $400 regardless of the value of the land.
This issue falls under Section 19 of the Act which outlines what a non-citizen should pay: ”Where any land situated in Antigua and Barbuda and held by a non-citizen, whether (a) pursuant to a licence issued under section 4; or (b) without a licence, is disposed of by him whether by sale, gift, exchange or otherwise he shall be liable to pay the Commissioner [of Inland Revenue] a land value appreciation tax equal to five percent of the difference between the value of the land at the time he became the owner thereof, together with any subsequent expenditure of a capital nature thereon and the value of the land at the time of disposal.”
However, the government is contending that the lawyers are turning to another section of the law under which a fee of $400 is charged to Antigua and Barbuda firms when the firm, whose directors constitute more than 33 percent of all directors, acquire real property.
The issue of the aforementioned fee can be found in Section 18 of the Act which states, “18. (1) A licence granted under this Act shall be subject to stamp duty to be determined as follows(a) where the licence is granted to hold land in fee simple and the consideration on sale to the licensee is money or money’s worth, the duty shall be at the rate of five per centum of the consideration; (6) where the licence is granted to enable the licensee to hold a mortgage on land the duty payable thereon shall be one hundred dollars; (c) for any other licence, the duty shall be four hundred dollars.”
The minister said the issue, which dates back to approximately 20 years, was discovered during a recent audit and the Solicitor General and a lawyer were invited to Cabinet on Wednesday where the matter was discussed.
“When we audit these fees, we see opportunities where there have been gaps in the process. We also saw that one of the revenue streams we have not gotton sufficient yield from is property taxes. We are saying that it is only performing at about 22 percent of what it is capable of and that is another area that we have begun to audit.” Nicholas said.
He said that the Solicitor General has advised that the issue has to be addressed by amending the law to
ensure greater clarity. The Cabinet has promised to take the amendment to parliament the next time it is convened. 
The minister further stated that his department has moved towards ensuring that there is automation,
information that would allow the government to collect more taxes, and this was made available to the Inland Revenue Department (IRD).

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