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West: Many of T&T’s rich not paying fair share of taxes
There are many economic actors in the society who are earning a good living and are clearly avoiding their fair share of taxes while benefiting from services provided by the State, says Minister in the Ministry of Finance Allyson West.
West made the statement while piloting the 2018 Budget in the Senate yesterday — her maiden Budget delivery.
She said there is serious concern regarding the equity in the administration of the taxes.
“We have wage earners who are relentlessly taxed by the week or the month; who may be living from pay cheque to pay cheque while a wide range of persons making quite a good living aren’t bearing their share of tax.”
“This is regressive and repressive. It’s in this context, that Government has looked at good practice options to address tax administration,” West added.
She said the T&T Revenue Authority is expected to begin operations in 2018.
West said the difference between the taxes that should be collected and the taxes that are collected in T&T is between $12 billion and $15 billion, according to a recent study by University of the West Indies economists.
The study also showed a Corporation Tax gap estimated to be between TT$5.1 and TT$6.6 billion and the VAT gap between TT$1.9 and TT$2.4 billion.
She said the total revenue collected by Government in 2017 was $10 billion less than budgeted.
“It’s for this reason that a significant component of our fiscal policy will be to address tax administration.”
Case studies by reputable international institutions indicate a well–structured Revenue Authority not only facilitates coordination and collaboration between main tax collection offices, “but also allows for the recruitment, assessment and proper reward of specialised staff which is not always possible in the traditional public service,” she said.
On property tax, West added, “The time has come when property owners must begin to contribute a share of these benefits to assist in financing T&T’s development and providing funds for the servicing of the communities in which their properties are located.|
“It isn’t Government’s intention to introduce taxes which place too heavy a burden on the population, which is why the Property Tax Act introduces rates of tax lower than those under the Land and Building Taxes Act and the Municipal Corporations Act.”
She said while the Gaming Industry is worth an estimated $15 -$20 billion, little tax is collected. Compliance rate by Members Clubs and Amusement Gaming operators is less than 10 per cent and seven per cent, respectively.
“The proposed gaming legislation is to be laid in Parliament soon and we’re hopeful that with the support of our friends on the other side, who in fact crafted the Bill, that legislation will be in place in 2018.”
“In the interim, we propose to more rigorously enforce current legislation which provides limited industry regulation,” she said.
She added, “These are unusual times which call for major changes in our thinking, policies, institutions and our approach to how we live. It calls for serious adjustment from all sectors of society and each of us.”
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