Building owners show mixed reaction to BSB tax plan
BANDAR SERI BEGAWAN
COMMERCIAL building owners and developers in the capital gave mixed responses towards the soon-to-be-imposed Building Tax, saying that it could be a little more burdensome for them.
"A dismal outlook could be in place this year for commercial building owners, who were previously beyond the Municipal Department's control," said one commercial building owner from Menglait.
Ismail, who is unwilling to disclose his full name, reiterated that until they can fully diversify their revenue to fulfil the Building Tax requirements, it seems that business revenue outcome could be quite disheartening.
"After enjoying the facilities for so long, I wonder how we could adapt to the idea of paying for it. It is a requirement which we must respect as it concerns to the development of the country, but since business is quite slow compared to 5-10 years ago due to rising competition and less demands, I wonder how we could meet the (requirements)," he told The Brunei Times yesterday.
The Municipal Board, which comprises of key ministries, non-government organisations and several departments under the Municipal Board Act Chapter 57, is slated to impose a 12-per cent Building Tax this year on commercial buildings in the newly-gazetted Bandar Seri Begawan.
Ismail indicated that the 12 per cent tax could be a little too overbearing on revenue generated from their tenants. "Maybe they should lower it (Building Tax) down and raise it gradually to ensure a positive diversification of revenue stream. We have other commitments as well since most of us are using credit from financial institutions to develop. There are other business aspects to look at as well such as salary, electricity, maintenance and so on." he said.
"We will lose in some grounds concerning attracting Foreign Direct Investments (FDI) as the tax free environment is one of our main highlights. The business environment is very competitive here due to low demands," he said.
Hj Saiful, a small building owner whose income derives from the three shops he rents out to, exclaimed that this could be quite hard for him. "I cannot raise the rent anymore as they (tenants) are bound under the tenancy agreements we signed. How about little guys like us? I built the shops from bank loans where my land is collateral to it. If I have to part with nearly 12 per cent of my income it could be disastrous. I have maintenance to think of for the sake of my rentors who rely on it. On top of that this is my only job, what about income to feed my family?" he said.
"The police and fire and rescue are paid by the government, does my tax contribute to their pay? So if I do not pay the tax, will my shop burn to the ground if a fire happens? How about the buildings outside Bandar Seri Begawan, they enjoy the same facilities besides the maintenance and waste management which is minor as we do it ourselves all the time?" he asked.
Hoe, a developer who is also not willing to provide his full name, cited that with developers this issue could be a little more arduous. "Meeting the requirements of the Building Tax, other taxes, bank credit, partnership profit sharing and normal business hurdles such as those who run away from rent are going to attribute to the revenue potential."
Hoe, who came to Brunei Darussalam with the intention to develop land for both business and national development, said "The attraction of a literally tax free environment is what attracted me in the first place. Potential areas such as Kiulap and Berakas are what we developers dream of. It was only exclusive to Brunei Darussalam but now....," he said trailing off while adding that he is unsure of how to comment on this.
The tax will be divided amongst 12 services and facilities to ensure a sustainable development within the area and also to diversify the country's revenue. The Municipal Department said the services and facilities will be updated if deemed so by the Municipal Board.
The Building Tax on each building will differ depending on the evaluation and assessment of the Municipal Department. Payments could be made in two settlements in January and July.
According to the Municipal Department, should there be any discrepancies in regards to the evaluation and assessment of tax rates of the commercial buildings, a complaint could be filed 21 days after the tax notice is sent to the owners.
The Brunei Times