Labuan businesses not ready
Published on: Sunday, November 10, 2019
LABUAN: A worryingly high number of business establishments and other property owners in Labuan are not ready for any assessment rate hike that will result from the proposed property valuation which is scheduled to be implemented from Jan 1, 2020.
This finding, based on a survey made by the Labuan Business Chambers Alliance, was disclosed to reporters following a briefing organised by Labuan Corporation (LC) on Friday.
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The two-hour briefing was attended by all the business chambers here and the media.
To recap, a Notice on New Assessment List 2020 was issued by the local authority, Labuan Corporation, on Oct 21 and was circulated widely on the island, sparking confusion and objections among the business community, especially those with a number of high value of properties, and property owners such as home owners in the housing estates.
More than 15,000 properties on the island are subject to the assessment.
Disagreeing with the timing of the proposed tax hike, businesses have called on LC to reconsider in light of Labuan’s economic slowdown and uncertainty, as they require more clarity to help them prepare for it.
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In response to their grievances, LC Deputy Chief Executive Rithuan Ismail held a briefing on Friday on the proposed new assessment.
However, the situation was tense with various issues highlighted.
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Rithuan stressed the implementation of the new assessment was still being finalised, with property owners given until Dec 17 to present their views and suggestions.
Six hours after the briefing, a dialogue led by Labuan Member of Parliament Datuk Rozman Isli with the Labuan Business Chambers Alliance was held in a leading hotel with attendance by local and national media representatives.
Their conclusion was that the assessment rate hike should be put on hold at this time of economic uncertainty.
They advised LC to go ahead with its property assessment in accordance to the Notice on New Assessment List 2020, but “leave alone and retain” the existing annual assessment rate.
LC Chief Executive Officer Dr Fary Akmal Osman said the agency was allowed to increase the assessment rate by up to 300 per cent as the existing rate was already outdated since 1994.
“As it has not been finalised yet, we are open for inputs and suggestions from all parties concerned before its full implementation in January 2020.
“There might be a discount on the assessment rates after the properties concerned are reassessed, and it is subject to the approval from the Minister of Federal Territories,” she said in a WhatsApp message.
Almost all the property owners here, including those owning houses in the residential areas, have received letters concerning the assessment of their properties and showing potential increase in valuation of 70 to 540 per cent. There is some confusion on the mechanism used in the assessment.
Rozman said LC should come up with a clearer and understandable formula in the property assessment.
“LC must not burden the taxpayers if it is facing insufficient fund to administer the island, as it should ask for more funds from the government or the Ministry of Federal Territories,” he said.
Meanwhile, Labuan Indian Chamber of Commerce and Industry President Datuk Dahlif Singh said all property owners would be forced to pay more than double in assessment rates beginning next year, which would be a financial burden to them as business activities were slowing down.
Labuan Tiong Hua Chamber of Commerce President Datuk Wong Kii Yii asked LC to consider the softer business environment before raising assessment rates rather than simply following what other councils were doing, as the economic climate here was different from elsewhere.
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