The cash strapped Federal Government of St. Kitts and Nevis stands to collect tens of millions of dollars in penalties from violators of a 1974 Law that requires Mortgagees of land to pay stamp duty. That law is the Stamp (Amendment) Act, 1974-6. The effective provisions are contained in Sections 59(A), 59B(1) and in the schedule at Section 18 subsection (2) (d).
That schedule at Section 18 shows that when land is transferred by means of a mortgage, both the seller of the land and the mortgagee are required to pay stamp duty. The mortgagee is the one who lends money to the purchaser of the land and holds a lien- a mortgage, on the said land as security for the loan. However, instead of paying their share of stamp duty, the mortgagees- the lenders, have passed on the tax to the mortgagor, the borrower, the purchaser of the land.
Section 59 B(1) of the Stamp (Amendment) Act, 1974-6 prohibits the passing on of stamp duty and Section 59(A) gives the right to recover stamp duty that was illegally passed on. It reads, Where in the case of a Conveyance or Transfer of land the vendee or transferee is compelled to pay the portion of stamp duty payable by the vendor or transferor of the land he shall have the right to recover the amount so paid from the vendor or transferor.
Therefore, the Mortgagors who are theBorrowers and the Government stand to collect many tens of millions in repayments and penalties if this law were to be enforced. According to Section 59 B (1) of the Stamp (Amendment) Act, 1974-6, the penalties for passing on stamp duty are as follows: Whosoever sells or transfers land to another person and passes on or attempts to pass on his liability to pay that portion of stamp duty payable by a vendor or transferor to that other person shall be guilty of an offence against this Act and on summary conviction therefor before a magistrate to a fine not exceeding the aggregate of five hundred dollars and an amount equal to the stamp duty which he passed on or attempted to pass on.
As was explained above, the Mortgagees, that is, the lenders are the Transferors when the instrument of transfer of land is a mortgage. Therefore the mortgagees of land in St. Kitts and Nevis have violated this law for over thirty years in that they have been passing on their liability to pay stamp duty to the borrowers. It is estimated that the Government could collect at least fifty million from the outlaw mortgagees.
But there are some other very grave implications to the way the Government is dealing with these serious violations of the law. For whatever reason, it appears that the Government wants to sweep this valuable coin of challenge and opportunity under the mat of cowardice and irresponsibility.
In March this year, the Stamp Amendment Act, 2005 was passed in Parliament. The objective of that Amendment is to transfer the full liability to pay stamp duty to the seller of land. Consequently, on July 1, 2005, when this Amendment goes into effect, the mortgagees - those who lend money to poor people to buy land and make a lot of money in interest charges on such loans, will no longer be liable to pay stamp duty.
This consequent has only one meaning- The Government does not have the guts to stand up to the deceitful gang of white-collar criminals. Without a murmur of resistance, the Government is cowardly handing over to this lawless band of free-market bandits, the right of the ordinary citizens of this country to aspire to owning a piece of the land for which their forefathers and foremothers were mercilessly sacrificed.
Everyone knows that the Stamp Amendment Act, 2005 will serve only to increase the price of land to the poor purchaser who has to borrow money and mortgage his land, in order that he will eventually own it. Not even the Government stands to benefit from the Amendment because it has been collecting its full stamp tax. It is only that, half of the collections have been from the wrong people, that is from the mortgagors- the borrowers when it lawfully should have come from the mortgagees- the lenders.
On the other hand, the 2005 Amendment will release the Money Lenders from their lawful obligation to pay stamp tax. Therefore, Government will not get any of the hefty interest rates that Money-Lenders make on mortgages. They will also benefit from this connivance to make lawful, their lawless act of passing on their portion of stamp duty.
There is yet another very serious perspective to this Stamp Amendments Act, 2005. By seeking to pull the teeth from Sections 59 A and 59 B (1) of the Stamp (Amendment) Act, 1974-6, the Government is surrendering its sovereign right to tax all income derived from the mortgage of land.
Furthermore, The Government by not enforcing the said provisions of the Law has abdicated its sovereign responsibility to equitably redistribute national income and thereby promote the right of every citizen of St. Kitts and Nevis to aspire to be free from economic bondage and poverty.
An appeal is here being made to the Federal Government of St. Kitts and Nevis to gather its guts and stand up to the gang of lawless lenders, lawless mortgagees, and enforce the law. Protect the poor, powerless borrowers, and stop siding with thieves and hijackers. You are Government.
You have more backers than you think. Ask Baldwin Spencer in Antigua. The East Caribbean Central Bank (ECCB), The International Monetary Fund (IMF), The World Bank, The European Union (EU), The United Nations (UN) and the masses of Poor People will back you up. Collect your taxes. Stamp out corruption and greed. The world is watching you.
