Legislation for new Revenue Authority coming
Legislation for an integrated revenue authority will be brought to Parliament before the end of this fiscal year.
In his mid-year budget review, Finance Minister Colm Imbert said the integrated authority is necessary to improve tax collection.
Imbert said there was a shortfall in VAT collections in the first half of 2017 amounting to $669 million
“While some of this could be explained by the reduced spending by the oil and gas companies given the depressed oil and gas prices environment, and a decline in discretionary spending by individuals there are indications that the major problem continues to be the longstanding weakness in the tax administration in the Customs and Excise division and the Board of Inland Revenue,” he said.
“This weakness has continued for years in part due to weak management and the tendency for both institutions to work in silos rather than in a collaborative manner. Previously buoyant energy revenues had masked the revenue losses arriving from tax non-compliance. With the fall in energy revenues we are now confronted with the full impact of poor revenue administration,” he added.
Imbert said keeping with the Government’s intention to have the Revenue Authority established by the end of this fiscal year and to submit the enabling legislation to a Joint Select Committee of Parliament for scrutiny, an International Monetary Fund (IMF) and Caribbean Regional Technical Assistance Center (CARTAC) Mission visited Trinidad and Tobago in October 2016 to review the current state of revenue and customs administration, to recommend strategies for institutional strengthening, including the establishment of a Revenue Authority.
He said in February 2017, after considering the Mission’s Technical Report which outlined the options for reform in revenue and customs administration, Cabinet agreed to the establishment of a Revenue Authority as the preferred modality for modernising tax and customs administration.
"Accordingly, a Project Implementation Committee has been established, to expedite the work required to implement the Revenue Authority in the next fiscal year. Notably, in this effort at modernisation of our archaic and outdated revenue collection system, by this new Government, there will be appropriate consultation with the recognised Trade Unions, in order to build consensus and agreement on the aims and objectives of this important project," he said.
Imbert said just as personnel was recruited to assist with the collection of Property Tax, the Government will embark on an employment drive to recruit young and not so young professionals to assist with VAT And other tax collections and noted that the newly opened Government plaza has space to accommodate new staff with the new Inland Revenue building alone able to accommodate 400 new staff.
Imbert said despite the shortfall in VAT collection, Income tax collections were 11 percent higher than expected at $743 million because of the collection of SPT and the application of the new 30 percent tax bracket on corporations and individuals with taxable incomes in excess of one million dollars.