KINGSTOWN, St. Vincent – The increase in property tax here is likely to have a “multiplier effect” on citizens’ spending power, according to Opposition Leader Arnhim Eustace.
Owners of properties worth more than EC$25,000 on the market will this year begin paying 0.08 per cent of the value of the property in taxes, an increase of about 15 per cent.
“It is going to have its additional multiplier effect, as economists like to call it. … All it really means is that it is going to have more impact that you expect initially,” Eustace said on radio on Monday.
He said that landlords are likely to try to recoup the monies they pay in tax by raising rent.
“[They are] not going to pay the full property taxes and ain’t pass on something to the persons who is renting the house,” Eustace said.
In keeping with the New Democratic Party’s (NDP) belief that there is an unofficial wage freeze here, Eustace said: “When you have impact on rent, then you have a freeze on wages, then it means that the person has to use more of their existing money that they get every month to pay their rent.”
He said such a person then has less to buy food, pay for utilities and other commodities “because they have the same salary”.
“So it is going to have its impact on the other things that you need to purchase because you are going to have less money to purchase those,” said Eustace, an economist.
“That is how it multiplies. So you see the impact is going on and on and on and it is all negative. It’s making things harder for you to earn and have a reasonable standard of living,” he further stated.
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