BUDGET STATEMENT 2014
18
SUSTAINING GROWTH, SECURING PROSPERITY
whether housed or unhoused with a view to
implement this tax by July 1, 2014. In phase 2,
we will impose a tax on commercial properties
and in phase 3, we will impose a tax on
agricultural lands and on residential properties
with a deductible allowance to provide relief
to certain agricultural land owners and
low-income homeowners.
PENSIONS
Mr. Speaker, I turn now to an area that forms a
critical component of our social safety net for the
aged – the Pension System. We are well aware
that a considerable number of our citizens are
not covered by formal pension arrangements.
Over the past year, we have sought to accelerate
the work of the Ministry of Finance and the
Economyon this issue.Wearenowwell advanced
with a draft of the Occupational Pension Plan Bill
and have re-engaged consultants to undertake
technical work for:
• increasing survivors’ benefits;
• removing the cap of 33 1/3 years of service
on pension accruals;
• reducing the vesting period from5 to 2 years;
• improving portability within the public
service;
• introducing contributions to public sector
pensions; and
• introducing
pensions
for
daily-paid
employees of Government.
A critical aspect of the pension reform is the
strengthening of the existing ICT system. In
recognition of the need for prospective retirees
to plan their financial futures, we have set as
a primary objective immediate payment of
retirement benefits in the public service — retire
today, pension tomorrow!
In parallel with this technical and analytical
work and in order to ensure that all citizens
are prepared adequately for retirement, the
Government will bring new legislation next year
• the establishment of a fair systemof taxation
for life insurance companies in light of
removal of the statutory fund in the proposed
insurance legislation.
Mr. Speaker, the leakage from the tax system
is unacceptable. I intend to address this
immediately by revisiting the relevant sections
of the Corporation Tax Act and by strengthening
the capabilities of the Board of Inland Revenue,
in particular in the area of enforcement
and compliance in business and individual
taxpayers’ assessments.
VAT REFUNDS
Mr. Speaker, we have recognised that the
delay in processing VAT refunds has been
impeding the growth of exports and private
sector development in light of the fact that such
delays could represent an increase in the cost
of production. I propose to simplify the VAT
refund process for the manufacturing sector. As
an initial step, I shall increase the allocation for
all VAT refunds with a view to ensuring that all
VAT refunds are made, at minimum, within the
legal timeframe. To ensure that this is achieved, I
propose to allocate $1.0 billion in the first month
of the new fiscal year for clearing the backlog.
LAND AND BUILDING TAX
Mr. Speaker, a land and building tax regime is a
key pillar in all modern tax systems. Recurrent
land and building taxesmeet all the conditions of
a good and fair tax.The backbone of a successful
land and building tax is the proper valuation of
properties within a transparent framework. This
will require the property rolls being brought up-
to-date. I propose to phase in these taxes over
the period 2014 to 2017, during which time the
properties will be valued and consultations will
be held with all stakeholders.
In phase 1 and effective immediately, we
shall commence valuations of all industrial
land, including plant and machinery,
