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Sunday, July 13, 2025

TTRA repeal sparks intense debate in Senate

by

KEVON FELMINE
15 days ago
20250628

Se­nior Re­porter

kevon.felmine@guardian.co.tt

In re­sponse to calls from Op­po­si­tion and In­de­pen­dent Sen­a­tors for the T&T Rev­enue Au­thor­i­ty (TTRA) to be main­tained, Labour Min­is­ter Leroy Bap­tiste is stick­ing to his po­si­tion that the agency will not im­prove rev­enue col­lec­tion.

In his first con­tri­bu­tion in the Sen­ate dur­ing the de­bate on the T&T Rev­enue Au­thor­i­ty (Re­peal) Bill, 2025, Bap­tiste cit­ed sev­er­al ex­pert re­ports which found no re­li­able ev­i­dence that se­mi-au­tonomous rev­enue agen­cies in­her­ent­ly per­form bet­ter. He said for­mer Fi­nance Min­is­ter Vish­nu Dhan­paul had ref­er­enced var­i­ous re­ports high­light­ing dys­func­tions with­in the Board of In­land Rev­enue (BIR) and Cus­toms and Ex­cise Di­vi­sion (CED), in­clud­ing un­der-re­sourc­ing, un­der­staffing, and poor treat­ment of work­ers, is­sues he at­trib­uted to the ac­tions of the pre­vi­ous gov­ern­ment.

Bap­tiste said the Op­po­si­tion’s claim of a $10 bil­lion tax gap was based on the false equiv­a­lence that the TTRA equalled greater rev­enue. Re­fer­ring to a 2007 re­port by Mau­reen Kidd and William Cran­dall on T&T’s tax sys­tem, he said there was no con­clu­sive ev­i­dence that rev­enue au­thor­i­ties con­sis­tent­ly out­per­formed tra­di­tion­al gov­ern­ment de­part­ments.

He added: “But Kidd and Cran­dall went fur­ther. They said there is no ob­jec­tive analy­sis show­ing that coun­tries with rev­enue au­thor­i­ties out­per­form coun­tries with­out them. That is what the ex­pert said, so this mon­ey, there is ab­solute­ly no cor­re­la­tion be­tween a rev­enue au­thor­i­ty and the col­lec­tive of more rev­enue.”

Bap­tiste al­so ref­er­enced a 2017 re­port that warned of in­creased ad­min­is­tra­tive costs, mis­sion drift, and weak­ened over­sight with­in rev­enue au­thor­i­ties, with no mea­sur­able gains in rev­enue or fis­cal ca­pac­i­ty. A 2023 glob­al re­view echoed sim­i­lar find­ings.

He ar­gued that in­tegri­ty, sus­tained in­vest­ment, and in­ter­nal mod­erni­sa­tion were more im­por­tant to ef­fec­tive tax col­lec­tion than struc­tur­al au­ton­o­my.

Bap­tiste com­pared the pro­posed TTRA to the mod­el of the Re­gion­al Health Au­thor­i­ties (RHAs), which since 1994 had pri­ori­tised con­tract labour and union bust­ing over pub­lic ser­vice, erod­ing pub­lic trust. He warned against con­vert­ing state de­part­ments in­to statu­to­ry bod­ies like the Hous­ing De­vel­op­ment Cor­po­ra­tion (HDC) and Tourism De­vel­op­ment Com­pa­ny with­out re­solv­ing fun­da­men­tal hu­man re­source and tech­no­log­i­cal gaps.

The min­is­ter ac­cused the pre­vi­ous ad­min­is­tra­tion of de­lib­er­ate­ly crip­pling the BIR and CED by with­hold­ing re­sources while blam­ing the staff for sys­temic in­ef­fi­cien­cies.

“Pub­lic ser­vants were de­scribed as in­ef­fi­cient, cor­rupt and out­dat­ed. What sig­nal does this send? That those who up­hold our fis­cal laws are un­wor­thy of in­vest­ment and that pro­fes­sion­al­ism can be un­der­mined for po­lit­i­cal ex­pe­di­en­cy? Rather than em­pow­er them with bet­ter tools, they blamed them for sys­temic rot,” he said.

Bap­tiste re­mind­ed the Sen­ate that while many preach ac­cep­tance of change, true po­lit­i­cal change oc­curred on April 28 with the gen­er­al elec­tion. He crit­i­cised the Op­po­si­tion for re­vis­it­ing failed poli­cies, point­ing to Dhan­paul’s ad­mis­sion that TTRA dis­cus­sions were alive in 2010, short­ly be­fore that ad­min­is­tra­tion lost pow­er.

“You know what hap­pened with this same TTRA and elec­tion? That ad­min­is­tra­tion lost the elec­tion in 2010. Why? Be­cause the peo­ple re­ject­ed that pol­i­cy as it re­lates to treat­ing the is­sues men­tioned with BIR and Cus­toms & Ex­cise. It is clear, but ac­cord­ing to the old peo­ple, ‘like stick break in their ear.’”

In his con­tri­bu­tion to the de­bate, Dhan­paul said if Fi­nance Min­is­ter Dav­en­dranath Tan­coo man­ages to close the tax gap by the end of fis­cal 2027 with­out the TTRA, he will re­turn to the Sen­ate to is­sue a for­mal apol­o­gy.

He said the Gov­ern­ment could hire 2,000 tax of­fi­cers if it suc­ceeds but won­dered if it would act if tax eva­sion ev­i­dence reached the se­nior lev­els of the BIR.

“When that list reach­es the hi­er­ar­chy of the BIR, I will leave it at that,” he said.

Dhan­paul said the TTRA was nev­er an­ti-work­er and em­ploy­ees had op­tions - join the TTRA, trans­fer else­where in the pub­lic ser­vice, or ac­cept a vol­un­tary sep­a­ra­tion pack­age.

He said the TTRA was de­signed to be apo­lit­i­cal and its suc­cess should not be linked to par­ty agen­das.

Dhan­paul who had served in the Fi­nance Min­istry since 2002, re­called sev­er­al fea­si­bil­i­ty stud­ies, in­clud­ing one led by for­mer In­tegri­ty Com­mis­sion Chair­man Gor­don Deane, that iden­ti­fied 13 struc­tur­al de­fi­cien­cies in rev­enue col­lec­tion, in­clud­ing out­dat­ed in­sti­tu­tion­al frame­works, poor hu­man re­source man­age­ment, ob­so­lete tech­nol­o­gy, and low tax­pay­er com­pli­ance.

He said the 2007 Kidd and Cran­dall re­port, com­mis­sioned with IMF tech­ni­cal as­sis­tance, warned that with­out ad­min­is­tra­tive re­forms rev­enue po­ten­tial would re­main sup­pressed.

He said by 2009, when T&T record­ed its first fis­cal deficit in years, the ur­gency to act in­ten­si­fied. In 2017, un­der the PNM, the IMF again as­sist­ed the Min­istry of Fi­nance dur­ing a pro­longed pe­ri­od of fis­cal deficits.

Kidd and Cran­dall’s as­sess­ment con­clud­ed that al­though the le­gal and ICT frame­works were sound, is­sues such as weak tax­pay­er reg­is­tra­tion, min­i­mal dig­i­tal ser­vices, and VAT short­falls equiv­a­lent to five per cent of GDP caused the coun­try to lose be­tween $10 and $20 bil­lion in rev­enue.

Dhan­paul said at the time of his de­par­ture from the Fi­nance Min­istry in 2020, sev­er­al court cas­es chal­leng­ing the TTRA were be­fore the Privy Coun­cil. In 2024, the court ruled that the TTRA’s es­tab­lish­ment was con­sti­tu­tion­al and did not vi­o­late pub­lic ser­vice over­sight, fund col­lec­tion pro­to­cols, or tax­a­tion man­dates.


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