Thank you Minister Ali Khalil for deciding to investigate a
problem that I have been relentlessly harping on since 2006, as shown on my
innumerable blogs and articles in l’Orient Le Jour and in business magazines
and newspapers, let alone my numerous past meetings with several employees at
the Minister of Finance.
May I assume that you have had a look at my blogs or at my
facebook publications, or at my messages on Twitter with regard to that TOP
IMPORTANT SUBJECT?
Minister Khalil, I do not need, I am sure, to stress upon the
necessity to undertake a thorough revision of the entire procedure that leads
to the assessment of the 6% real Estate registration fees.
In a country where, on average, fifteen million square
meters of Real Estate properties are built every year, as per the reports of
the Syndicate of Architects of Lebanon, the way the evaluation and the
subsequent assessment of the properties were conducted, and are still conducted
to this day, was simply “ludicrous”, to say the least. Allow me to enumerate
some of the wrong features of the process:
1. The Commissions in charge of the evaluation of the properties
were, sometimes, evaluating them at one tenth of their value, as was mentioned
in the press a few years ago.
2. But another unacceptable feature of this registration process is
that the 6% RERF (Real Estate Registration Fees) is not
mandatory but optional, as was remarked to me by a team of Finance Ministry officials
whom I met in 2006 at the MOF building. My reply to them, at the time, was: “ Which
real estate dealer would consent to leave a property worth millions of US
dollars unregistered? And which bank would agree to lend this dealer money
without registration? The employees in question looked at each other
significantly and remained silent. That was in 2006, minister Khalil. Since
that date, I estimate that the State Treasury has lost, in RERF alone, some
twelve billion US dollars (8 yrs x $1.5 billion= $12 billion) in registration
fees for failing to heed my suggestions at the time.
3. But all is not entirely lost, Minister Khalil. May I have the temerity
to suggest the following reforming measures in that domain?
a. Start with a law making the registration of all properties
obligatory to all property owners.
b. Review the entire procedure currently followed by the commissions
in charge of the evaluation of all properties.
c. Make the publication of the property registration and the amount
of the fees raised and collected obligatory, and allow all citizen free access
to the registrar records.
d. Consider the possibility of raising the fees by an additional
percentage of 2%, if that revenue is considered necessary to improve the financial
resources of the State.
4. Will you allow me to suggest that, should the first above-mentioned
three measures alone be adopted, the State can collect at least some $1.5 additional billion
dollars a year from 2015 onward.
Hoping that you will consider granting me a brief interview
to present some other valuable suggestions regarding your ministry?
Respectfully yours
George Sabat (ACMA) Chartered Management Accountant, UK
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