Morobe okays tax law
The National – Monday, March 14, 2011
By Ellen Tiamu
THE Morobe provincial government has passed a property tax law, a first in revenue law in the country.
The Improvement on Land Tax Act 2011 imposes a tax on improvements on all land, including voluntary registered customary under the Land Tenure Conversion Act, other than the land still held under customs in Morobe.
This property tax law will be the first of its kind in the country and Morobe is breaking new grounds in revenue law.
Section 86 (1) (d) of the Organic Law on Provincial Governments and Local Level Governments gives the provincial governments exclusive legislative power to legislate on this matter with the enabling legislative power provided for under Section 42 (1) (c) of the OLPGLLG.
The new provincial tax law is intended to impose tax on all improvement value of all land less the unimproved value of the land which is already imposed by the national government.
Work is now required for surveying and valuation of all land, except customary land and although this will cost money, Tutumang last Thursday agreed that the eventual benefit from taxes and levies would be greater.
The Improvement on Land Tax is different from the traditional method of assessing property tax which is based on the unimproved value of land and as such a statutory definition of the new revenue tax base, inexistent in the valuation Act, Chapter 327.
The Act only provides for the statutory definition of unimproved value.
Improvements in relation to the land other than the customary land means all buildings of any kind and style of architectural structure, affixed onto the alienated land of a value whether for dwelling, institutional, industrial, and commercial for any business purposes, agricultural or special purposes.
The rates of tax to be imposed on taxable improvements will depend on categories or zoning and the nature of taxable improvement.
The new revenue generation law allows for delegation powers to local level government to levy and collect tax on improvement on the land within the boundaries of their LLGs.
The original bill was drafted in 2005 with the provincial administration reviving it two years ago.