Duke says don’t accept revenue authority

Public Service Association (PSA) president Watson Duke says the country should reject the creation of a revenue authority as there is no guarantee it will be effective.

Speaking at a breakfast seminar titled TT Revenue Authority (TTRA): Its merits and demerits at the Couva/Point Lisas Chamber of Commerce yesterday, Duke said there is no clear indication that revenue authorities work.

When the TTRA comes on stream, it will subsume the powers of the Inland Revenue Division (IRD) and the Customs and Excise Division.

“In the world of revenue authorities, there is no clear indicating factor that revenue authorities’ work – the International Monetary Fund (IMF), the World Bank knows that ­– I went to the International Journal of Public Administration websites, they know that. There is no clear-cut information anywhere in the world that says revenue authorities work,” Duke said.

“That is simply because studies done on revenue authorities around the world are very premature and the information that is required is not always given, they always operate on a level of secrecy.”

He said there is no guarantee that revenue will increase with the introduction of a revenue authority.

“And whenever the revenue generation grows, it cannot be said that it is because of the revenue authority model, a number of factors fluctuate.

“When we are increasing ticket fines for speeding, for breaking red light, introducing property tax, raising gas, how can you tell me the revenue authority system is creating a surplus or is it the introduction of these new taxes?”

Saying this country has a high tax revenue to GDP ratio, Duke said a revenue authority would only be problematic.

“Based on the IMF, based on the World Bank, you have to consider tax revenue to GDP ratio – the World Bank will tell you if your tax revenue to GDP ratio is not low, do not go the way of a revenue authority, it is problematic and it is very costly to implement.”

Former minister in the Ministry of Finance, Mariano Browne said one major issue with the current bodies responsible for revenue collection is a staffing one.

“Part of the difficulty we have with personnel is when they get very well practised and they understand how the IRD works, guess where they go? The private sector,” he said.

“The bottom line is in the IRD. Quite frankly, if you are worth your salt, as soon as you have the opportunity you move somewhere else and that is one of the realities that we have in TT, not only in the IRD but in one of the key areas which is critical and essential in our ability to collect revenue.”