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Customs blamed for business problems

Thursday, November 16, 2017
Growing anxiety over Revenue Authority

Even as concerns and objections increase to the proposed establishment of the T&T Revenue Authority (TTRA), customs officers are being blamed for problems affecting the business community.

A businessman with a significant import business claims customs officers are abusing their authority.

Speaking on condition of anonymity, he said: “Customs is a major culprit in not understanding that whatever they do in terms of delays and other impediments impacts on the cost and competitiveness of doing business.”

He accused some customs officers of behaviour akin to that of a gang extorting money from business owners.

“It is ironic many of them complain about the increase in the standard of living when they are the ones directly responsible for driving that cost up,” he said.

Commenting on the businessman’s claims, a customs officials admitted: “In any organisation where you have money, power and people, there will be individuals who will be corrupt. While there are systems in place to shield the customers and organisation from corrupt officers, it continues to occur.”

However, another said: “The bribe has to come from somewhere and often enough it is from people who can afford to and do pay it.”

The businessman said: “T&T has to recognise that it is part of a global economy and this means we cannot do things the way we want to just because we like to do it that way.

“If we do things that are not competitive cost-wise with the people we are competing with, we are going to fail.”

He warned that T&T will not be able to keep up and said there is a disconnect as public servants do not believe they are there to serve the public, including the business sector.

Commenting on last week’s two-day protest by workers from the Customs and Excise Division and the Board of Inland Revenue, the businessman said he had been adversely affected with shipping delays which, in turn, negatively affected his bottom line and increased costs all around.

“Nobody wants to take responsibility but they are, in fact, the culprits,” he said of customs officers.

“One of the problems we are faced with is that customs officers have a wide range of authority. This can be misused by some who often end up on a power trip.

“We have given them authority to do things. They have taken on a sort of policing kind of approach rather than understanding the purpose of the authority and regulations they are trying to enforce.”

He said compared to other Caribbean territories, T&T is backward in this area as it lacks the necessary equipment and modernised systems.

“Customs in T&T can use a person’s likes and dislikes to insist on a 100 per cent inspection of goods. They use it as leverage to extract whatever they want,” he complained.

Asked to state if bribes are being paid was true, he responded: “That’s a fundamental part of it and that’s why this authority works for them and they don’t want to release it.”

The businessman estimates that overtime for customs officers is equivalent to 40 per cent of their total income, which had led to it becoming a structured element of their operations.

“There are a lot of ghost arrangements that go on. There is a huge abuse system and their problem is that they do not want to give it up,” he said.

With the implementation of the TTRA next year, government is hoping to minimise or entirely eradicate corruption in customs operations.

The businessman agrees definitive action is needed even in the face of opposition from the trade union movement.

“Over time, government has become so accustomed to being leveraged by the unions and the working class that they have given up managing, so no government manages the economy anymore. It just spends time managing their affairs for a five-year period,” he said.

He said he will support any effort by the government to dig their heels in and introduce the necessary changes. 

“This cannot go on. Everybody in T&T must be in support of a more effective way of doing things.”

The businessman offered some advice to Finance Minister Colm Imbert: “Raising taxes is not the solution, collecting taxes is the answer.”

Asked for comment on the situation, president of the Downtown Owners and Merchants Association (DOMA) Gregory Aboud said: “I can say I have never had that experience with the Customs division. Nothing has ever been asked of me, or any pressure placed upon us to extort anything from us in exchange for work or otherwise.

“We have had issues with the slowness of the process and the number of stages via which the documents have to be processed, because at every stage some officer might not be available, or some officer has gone to their child’s PTA meeting, some officer might be off on his/her birthday, or somebody didn’t come out to work today because their car had to go to the garage.”

Aboud described this as an “endemic problem across all sectors of the public service.”

He speculated that customs officers might be wary of the establishment of the TTRA because of concerns over job security, longevity, transfer of benefits and tenure.

“These issues have to be addressed if you want officers who, in some cases, have worked their entire lives and are now being asked to give up their seniority and give up their tenure and give up their longevity of service in exchange for a new position in the TTRA,” he said.

“It is understandable they would be concerned about the impact of that arrangement on their net worth, their earnings, their seniority and their pensions.”

Aboud agreed that a co-ordinated approach is needed to link the operations of the Customs and Excise Division with the Board of Inland Revenue to achieve and maintain oversight and ensure transparency and accountability.

“I am not sure that performance would be guaranteed by the new system,” he said. “It does take us in the right direction with respect to co-ordinated revenue collection.”

Aboud said while there were leakages in the current system, everyone needs to be on the same page in terms of “wanting to enhance the collection of government revenue and level the playing field for the import and export of goods.”

He said Grenada, St Vincent, Jamaica and Barbados are in a better position than T&T.

“We have become soft, flabby and slow,” he said, even as he expressed optimism that the country can fight its way out of the current problems, citizens are encouraged to make lifestyle adjustments.

“There is a lot to worry about,” he said, adding that citizens cannot afford to wait for the generation behind to figure out how to propel the country forward.

T&T ranking falls in World Bank Report

According to The World Bank’s Ease of Doing Business Index released in June 2017, T&T is currently ranked at 102—down from 66 in 2014.

Jamaica is ranked 70th, while Dominica is in 98th position.

Areas measured included: Starting a Business; Dealing with Construction Permits; Getting Electricity; Registering Property; Getting Credit; Protecting Minority Investors; Paying Taxes; Trading Across Borders; Enforcing Contracts; and Doing Business in T&T.

In the category of Paying Taxes, T&T was given an “X” which means changes had made it more difficult to do business.

Revenue collection trends...

For more than two decades, setting up revenue authorities for tax and customs administration has been part of a trend towards increased autonomy in the public sector. There are close to 40 revenue authorities around the world clustered largely in Africa and Latin America.

Generally, revenue administrations in these regions are in need of massive reform and the creation of a revenue authority is considered a launching point for this work.

Each revenue authority embodies a series of policy choices that determines its autonomy, accountability and other characteristics.

Revenue authorities exist along a continuum, with some remaining close to the civil service while others enjoy greater autonomy.

A revenue authority is not an end in itself and should be a means for implementing reforms and improving performance. If used effectively, it can be a catalyst to enable broader revenue administration reform.


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