The proposed T&T Revenue Authority, which is needed in the current economic “guava season,” will have an Enforcement Division staffed by public officers appointed by the Public Service Commission– not politicians.
Finance Minister Colm Imbert confirmed that in the Senate yesterday while piloting a bill to establish the authority.
Its functions will include assessment and collection of taxes under revenue laws, enforcement of border control measures and a combination of the functions currently held by the Inland Revenue Division and Customs and Excise Division.
The TTRA is geared towards making the tax regime more efficient and enhancing taxpayer compliance.
The bill for the TTRA, after 11 years of effort and failing due to lack of Opposition support, will only require a simple majority vote for passage. It had previously required a special majority vote and Opposition support.
Imbert said, “Despite the well documented benefits that redound by way of establishing a Revenue Authority, the Opposition has resolved they will not support a Revenue Authority. As a result, Government proposed a solution to end this deadlock that is seamless, elegant and in keeping with the rule of law.”
He said this involved adjusting the bill and establishing the Enforcement Division staffed by public officers. As a result, the bill doesn’t infringe constitutional clauses.
He said inclusion of the Enforcement Division and public officers will address concerns raised by naysayers, including concerns of politicisation of TTRA and political abuse.
On why the TTRA was needed, Imbert detailed inefficiencies of the current system cited by International Monetary Fund studies and the Oxford Business Group and World Bank.
The IMF, in 2019, indicated there was a VAT gap of around five per cent of GDP, which consisted of the compliance gap and policy gap. He said compliance is the problem and that gap is about two to three per cent - estimated to be worth $3 billion to $5 billion per year with VAT.
The TTRA is also needed in the“ guava season,” where there’s significant damage from the global pandemic, he added.
Collections due to TTRA establishment and other tax efficiency gains will ensure revenue collection is approached as a “world class business.”
It’s projected to result in increased collections ranging from 1 per cent of GDP in 2022 ($1.5 billion) to two per cent in 2024 ($3.2 billion).
Imbert said TTRA systems will prevent taxpayers waiting in long lines and being frustrated in seeking information clarification. He said Government hoped and prayed the bill would find favour with majority of Senators.
He said, “This is really needed at this time with our very difficult revenue situation and the call on the Treasury for unprecedented expenditure on the health sector to deal with the pandemic and other calls on the Treasury to provide financial assistance to those affected.
“I don’t think we can continue in the current situation ... with our highly and grossly inefficient system that lends itself to interference and a culture of tax avoidance and punishes members of the public who are conscientious and pay their taxes and comply with Customs laws,” Imbert said
The bill’s clauses include:
The Enforcement Division staffed by public officers will exercise enforcement powers.
• Public officers will exercise the powers, authorities and privileges conferred by the Customs laws, Excise Act and other revenue laws listed. The Bill maintains the current status quo. Consequently, in relation to enforcement, there will be no departure from what currently obtains
• A Director General will manage TTRA and have recourse to civil proceedings regarding enforcement of revenue laws.
• More intrusive functions, especially those currently being exercised by the Customs and Excise Division and found under the various revenue laws, are reserved for a Deputy DG.
• A TTRA board will be appointed by the Finance Minister, who will be able to give general policy directives. But the board won’t be responsible for enforcement of revenue laws and won’t provide specific instructions to the Director General or any other officer on any function.
• The board is also not permitted access to information within the authority that relate to any individual, as well as any documentation concerning legal authority for/against TTRA.
• The Director General is subject only to general directions of the board and general policy directions of the minister.
• The Director General to submit to the board and minister a monthly report on revenue collected.
• Public officers with permanent appointments or temporary appointments of at least two continuous years may, within three months of the coming into force of this Act, voluntarily retire or transfer to TTRA, or be appointed on transfer by the Public Service Commission to a suitable public office in the Enforcement Division; or remain in the Public Service.