The Public Services Association (PSA) has lost its lawsuit over the Government’s plan to introduce the long-touted T&T Revenue Authority (TTRA) to replace the Customs and Excise Division (CED) and the Inland Revenue Division (IRD).
Delivering a judgment yesterday, High Court Judge Westmin James dismissed the lawsuit filed by the PSA, through its member and customs officer Terrisa Dhoray, as the Government was seeking to implement the TTRA in August.
In the lawsuit, Dhoray was challenging the constitutional validity of the T&T Revenue Act 2021. She contended that certain segments of the legislation are unconstitutional, as they seek to interfere with the terms and conditions of employment of public servants currently assigned to the CED and IRD. She also claimed that the Government did not have the power to delegate its tax revenue collection duties.
The lawsuit specifically focused on Section 18 of the legislation, which was proclaimed by President Christine Kangaloo on April 24.
The section gives public servants three months to make a decision on their future employment upon the operationalisation of the TTRA. Affected public servants have the choice to voluntarily resign from the Public Service, accept a transfer to the TTRA, or be transferred to another office in the Public Service.
In its defence, the Government has claimed that tax collection could be delegated once guidelines are provided by Parliament.
In determining the case, Justice James ruled that tax collection is not a core governmental function that is non-delegable.
While he noted that taxation is a key source of a government’s revenue, and that the process of assessing and collecting taxes is essential, he noted there were currently instances of private entities being able to collect taxes on the Government’s behalf.
Justice James said: “It is common for VAT-registered individuals and businesses to collect taxes from consumers on behalf of the State and then remit those taxes to the appropriate tax agency.”
“Similarly, in the income tax (PAYE) regime, individual employers are responsible for assessing and collecting the income tax payable by the employee and remit that sum to the government agencies,” he added.
James also pointed out that several foreign countries have set up similar specialist bodies to deal with the “complexities” of modern taxation.
“While this is not determinative of whether the act here is constitutional, it does provide context of what has been considered core governmental functions by other states in the Commonwealth,” Justice James said.
Justice James also ruled that the delegation of the assessment and collection of taxes to a State corporation under the control of the Minister of Finance was permitted.
“The TTRA, being an agent of the Government for the assessment and collection functions with oversight of the Minister, a member of the Executive, the executive function related to this aspect of taxation has not been removed from the central government,” he said.
“The claimant has not pointed to how the delegation of these functions will undermine any core function of the government to impede the security or the administration of justice,” he added.
Justice James also noted that the enforcement duties of the TTRA would still be performed by public servants, who are not under the direct control of the minister or the TTRA board.
“Those powers over public servants remain with the Public Service Commission under the Act,” he said.
The PSA initially sought an injunction blocking the implementation pending the outcome of the lawsuit but it was denied by High Court Judge Betsy Ann Lambert-Peterson, who was initially assigned to preside over the case.
Her decision was upheld by the Court of Appeal.
After Justice Lambert-Peterson rejected the injunction, Dhoray made an application for her to recuse herself based on concerns raised by PSA members over the alleged friendship between her husband Gilbert Peterson, SC, and Prime Minister Dr Keith Rowley.
Justice Lambert-Peterson repeatedly rejected the links, as she claimed she could preside impartially in the case.
However, she eventually conceded, resulting in the case being reassigned to Justice James.
Guardian Media attempted to contact PSA President Leroy Baptiste for comment but calls to his cellphone went to voicemail. However, a member of the union’s legal team indicated that it plans to appeal the outcome of the case.
Dhoray was represented by Anand Ramlogan, SC, Jayanti Lutchmedial, Kent Samlal, Robert Abdool-Mitchell, Natasha Bisram, Vishaal Siewsaran and Ganesh Saroop. The State was represented by Douglas Mendes, SC, Simon de la Bastide, Leann Thomas and Svetlana Dass.