Last update: 05-Dec-2013 1:31 am
Thursday, December 05, 2013
Trinidad & Tobago Guardian Online
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Chamber on fiscal reform
In an analysis of the commitments made by the Minister of Finance, the T&T Chamber of Commerce outlined some of the key features of the reform exercise:
• Implementation of a more rationally structured and simplified tax legislation so as to make it more coherent and user-friendly
• Simplification and clarification of the rules relating to the taxation of benefits-in-kind provided to employees;
• Consolidation of the system of capital allowances which are currently provided for under various pieces of legislation;
• Introduction of provisions dealing with Transfer Pricing which were proposed in last year’s Budget Statement but not implemented;
• Addressing the thorny issue of the reform of the Board of Inland Revenue and the Customs and Excise Division and finding a model which delivers efficiency
We recognize, however, that such a reform exercise may be a long-term process, but in the interim, certain administrative reforms can be implemented which may ease the compliance burden of taxpayers, including:
• Rationalization of the tax calendar which currently provides for a multitude of payments and filing deadlines for Income Tax, Corporation Tax, PAYE, VAT and NIS.
Applying a consistent rate of penalty, which should be established at no more than 25 per cent, to all taxes.
• Reduction in the interest rate applicable to late payment of taxes. Currently the interest rate with respect to Income Tax and Corporation Tax is 20 per cent while a 24 per cent rate of interest applies to VAT. Such interest rates are oppressive and should be revised to be more in line with prevailing market rates and perhaps pegged to the Central Bank repo rate or other similar rate.
The Chamber is also pleased to see that a taxation regime on property is expected to come into effect within a year’s time, as we believe that Government is losing substantial revenue through non-collection of this necessary tax. What we would like to see is a taxation structure that is ultimately in line with the current market value of properties, but also takes into consideration the current economic climate.
We expect that the tax revenue will be used for purposes that improve the surrounding areas and services of the properties in that community. Revenues collected from the property tax should not become part of the consolidated fund and expended in other areas. The authorities must make the expenditure accounts of the tax revenue transparent and available to the public. The waiver on lands and building tax cannot continue ad infinitum and so we welcome the introduction of a modern and equitable property tax regime.
The Chamber will continue to monitor the progress of this implementation and offer its assistance with the set up of the regime.
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