On March 21, 2002 the Cabinet of Trinidad and Tobago appointed Gordon Deane, a then director of the T&T Chamber of Industry and Commerce, to chair a committee to examine the feasibility of establishing a Revenue Authority in this country.
Just over five months later, on August 22, that committee delivered its final report.
“The committee is of the firm view that given the problems currently experienced in the two Revenue Divisions together with the benefits that may be derived from a Revenue Authority, that a decision should be taken to establish without delay a Trinidad and Tobago Revenue Authority,” the Deane-chaired committee stated.
The two Revenue Divisions in question were the Customs and Excise Division and the Board of Inland Revenue.
Just three months shy of two decades after Deane’s call for its establishment “without delay”, a divided House of Representatives passed the Trinidad and Tobago Revenue Authority (TTRA) Bill.
The 21 government MPs voted in favour of the TTRA while the 15 opposition MPs voted against it, with no abstentions.
In his wrapping up of the Bill, Finance Minister Colm Imbert said without the opposition’s support to pass the bill by a special majority, the bill would instead create a hybrid system of appointments.
While the TTRA itself would be empowered to hire staff such as cleaners and clerks, its enforcement officers would only be hired by the Public Service Commission.
The TTRA Bill, 2021 was introduced and passed in the Senate on September 10 before being laid and debated in the House of Representatives.
“The establishment of the TTRA will reform the country’s revenue administration to optimise revenue collection and minimise tax leakages. It is estimated that collections arising from the establishment of the TTRA, as well as other tax efficiency gains, will begin during Fiscal Year 2022,” the Review of the Economy stated.
Because of the lapse in collection over the years T&T has lost billions of dollars in revenue. The tax gap has been conservatively estimated at between $13.1–$17.8 billion annually.
The VAT gap was assessed at $5 billion.
The TTRA is a semi-autonomous authority responsible for managing and collecting Government revenue and providing other services for the protection of that revenue, including investigating tax evasion and conducting audits.
Generally, a revenue authority is any tax administration entity that enjoys some measure of autonomy from the public service.
According to the Organization of Economic Development and Cooperation, there are more than 60 tax administration entities that can be classified as semi-autonomous agencies. These include USIRS, UKHMRC, Australia Tax Office, Canada Revenue Agency, Swedish Tax Agency, Singapore Inland Revenue Agency, Spanish Tax Agency, Saudi Arabia General Authority of Zakat and Tax, and the Mauritius Revenue Authority.
“The current system of taxation places the burden of revenue collection on a few:
—employees ( from both the public and private sector, whose taxes are withheld at source
—compliant businesses which are audited every year or which are forced to endure delays in refunds etc.
while others contribute very little to the national coffers, even though they enjoy the same benefits as the taxpaying citizens. This is both inequitable and demoralising. It makes paying taxes both a financial and a psychological burden,” Senator Allyson West told a symposium.
Finance Minister Colm Imbert in the national budget said the TTRA has been a long-sought institutional goal since the early 2000s.
“We have since come a long way. The passage of the TTRA Legislation had been hindered over the years by the requirement for a three-fifths special majority vote of Parliament. However, we have now taken steps to establish the Trinidad and Tobago Revenue Authority by adopting the legislation with appropriate amendments to allow for passage by a simple majority vote. This legislation was first laid in Parliament more than 11 years ago – in early 2010. Its objective then, as it is now, was to improve the efficiency of tax collection,” Imbert stated.
“An assessment undertaken by the International Monetary Fund in 2017, indicated that out of 28 high-level indicators, the Board of Inland Revenue received two A ratings, one B rating, 7 C ratings and 18 D ratings—a level of inefficiency which is clearly unacceptable and explains the significant tax gap now prevailing. Moreover, another study by the International Monetary Fund revealed in 2019, a VAT gap of around 5 per cent of GDP or $8 billion, half of which is estimated to be due to non-compliance and weak enforcement, with the other half due to exemptions. Accordingly, the Trinidad and Tobago Revenue Authority will now become the cornerstone of our tax collection capabilities,” he stated.
Imbert said the establishment of the TTRA would avoid “further wastage of precious time, and further leakage of precious revenue.”
The passing of the TTRA bill comes at a time when the government experienced significant pushback with respect to the Property Tax.
“A new tax administration system will be implemented with the commencement of the Property Tax Regime. Phase I of this project entails the creation of a valuation roll which will be utilised for the tax evaluation process. As at September 23, 2021, a total of 77,751 property records were entered on the Valuation Information System, of which 64,317 site inspections were completed. In 2017 the Valuation Division commenced the verification and approval of property records; placement of completed records unto the Valuation Roll commenced in April 2021,” the review of the economy stated.
“On September 6, 2021, the Commissioner of Valuations published a notice for mandatory submission of returns by property owners, occupiers and agents with a deadline for submission of returns by November 30, 2021.
This was eventually extended.
“It is anticipated that this will expedite the process of obtaining the property data required for the Valuation Roll. The following were also implemented to facilitate the mandatory submission of returns by property owners, occupiers and agents: i. Official launch of a website for online access to the Return as well as online completion and submission of Returns. ii. Publications of a Public Notice in the local newspapers informing property owners of the need to submit Valuation Returns Forms and all other accompanying documents. iii. Distribution of new Returns via TTPost’s direct mail delivery. It is expected that the Valuation Roll will be completed in the coming fiscal year and commencement of collections of the Property Tax will begin shortly thereafter,” it stated.
Another revenue-generating avenue adopted by the government was the passage of the Gambling (Gaming and Betting) Control Act No 8 of 2021.
“The Gambling sector in T&T is a thriving industry that yields approximately $16 billion annually and employs an estimated 7,000 persons. The Gambling (Gaming and Betting) Control Act No 8 of 2021“the Act” was passed in Parliament on June 23, 2021. Subsequently, on August 11, 2021, Parts I, II and X and Schedule 1 of the Act were proclaimed for the appointment of the Board of Commissioners and for the regulatory agency to recruit its staffing complement. Pursuant to the appointment of the Board of Commissioners and staffing complement for the regulatory agency, it is anticipated that the licensing regime will be proclaimed as soon as practicable. The derivation of fiscal revenue from this industry is expected to begin during the next fiscal year,” according to the review of the economy document.