A taxing time for all

Above: Illustration by VectorMine/DepositPhotos

BitDepth#1477 for September 23, 2024

On Tuesday, Finance Minister Colm Imbert promised a solution to the problems with payment that has dogged the resumption of property tax collection.

“Property tax is revenue,” Imbert told members of the Senate during the second sitting of the Fifth Session of the 12th Republican Parliament.

“So unlike your water bill or your electricity bill, which we are all accustomed to paying online when the payment is remitted to the relevant statutory authority, or even in the case of a phone bill, where the financial institution deducts an appropriate percentage as a service charge; unfortunately, under the Audit and Exchequer Act, revenue must be sent in. There can be no deduction of a service charge that is complication number one.”

“Complication number two is that systems must be in place to ensure that the payment of the property tax is properly recorded as revenue.”

This is a curious position, given that payments for public utilities such as water and electricity made online with a credit card will attract a service charge.

Presumably, these payments are successfully recorded as revenue from TTEC and WASA, which are arms of government.

Perhaps there’s some nuanced accounting difference between direct payments to the Inland Revenue Division and payments to a state utility, but the standing utility arrangements have clearly been worked out to the state’s satisfaction and should offer some examples of procedure.

“We are very close to a solution with respect to this matter, I expect it to be imminent,” Imbert told the Senate.

Why wasn’t all this considered, evaluated and planned before? The question must be legitimately asked of a minister with a declared interest in reducing local cash transactions.

A customer-first, convenience-driven approach to making payment as frictionless as possible, capably implemented to address a public determinedly resisting using bank cards or virtual payment solutions would have been a benchmark moment.

Instead, tax collection began using the least customer-friendly interface imaginable, lines outside a government building, a scenario guaranteed to further inflame public tensions about the tax regime.

It’s not as if there aren’t virtual payment systems existing which place the cost of moving money on the payor and which transfer cash value without service charges.

It’s not difficult to imagine an Automated Clearing House (ACH) channel that takes advantage of existing links between banking systems using existing identification data such as driver’s license, passport identification numbers or birth certificate PIN numbers to both make payments and ensure that they are routed to the correct property tax account.

This, after all, is exactly what computers are good at and these identification methods have been accepted by the government for decades.

Any of these unique digital identifiers, along with deed numbers could also have been utilised to create online portals for property owners to access their assessment information.

That would have acted as a backstop for the vast backlog of property assessments that are laboriously being launched as paper flotilla meandering through the choke point of the mail system.

The Finance Minister seemed to be hinting at an ACH solution during his address to the Senate, and it’s surprising that it took a public outcry to move things toward efficiency in collecting the revenue that the state has argued that it needs to address infrastructure improvements.

Of the 400,000 properties eligible for property tax payments, just 175,000 assessments have been completed and issued. Assessments are said to be in the process of being issued at a rate of 15,000 per day, but public complaints suggest that many are still in transit.

In a digital system, customer identifiers used on the earlier, now invalid three per cent assessment might have been used to look up the revised assessment, which conscientious homeowners could proceed to pay.

Instead, the Finance Ministry has left itself open to the consequences of a gap between bureaucratic cup and lip through which the Nile could comfortably flow.

The truly surprising thing about all this is that the whole process was low-hanging fruit for introducing a digital transformation process.

Planned from the start as an exercise in showing how much easier digital engagement could be for homeowners – a slice of the market that would overwhelmingly be prequalified to understand a digital workflow to achieve a successful tax payment – the government had an opportunity to showcase everything they had been blathering on about at every event, seminar and broadcast that would give them a slot.

And that’s a pity, because a 21st century tax implementation was an opportunity to show the benefits of digital transformation in practice.