IMF team in TT for tax administration review

A team from the International Monetary Fund (IMF) is in TT. This was confirmed on Friday by senior government officials. They said the team was here as a follow up to a visit in 2018 to examine the tax administration performed by the Board of Inland Revenue.

The officials said this was not an Article IV consultation.

In August, Finance Minister Colm Imbert said the absence of an IMF Article IV consultation before the 2019-2020 budget, would not affect the budget. He also said since TT was not in any IMF programme, it was not obligated to follow the IMF's directives. Imbert disclosed that Government has refused the IMF's suggestion that it devalue the TT dollar.

In his presentation of the 2019/2020 budget, on Monday, Imbert addressed the issue of tax administration as he announced Government will relay the TT Revenue Authority Bill in Parliament. He said the deficiencies in tax and customs administration contributed to a tax gap of an estimated $5 billion per year or approximately 10 per cent of public revenue.

"We can ill-afford to have our two major tax-collecting agencies under-performing and under-resourced," he said.

He spoke of the reform exercise which was based on the IMF's Tax Administration Diagnostic Assessment Tool report (TADAT) in 2017.

"Another TADAT review is currently in progress, following up on improvements made since the 2017 mission and we continue to address the range of weaknesses and deficiencies in the system identified in the 2017 report. We have spent time, effort and resources on the design of a viable model for efficient tax administration."

Imbert said the policy framework for the bill "is consistent with the revenue authority model which is geared towards improving tax payer compliance and minimising the tax gap.

"An autonomous revenue authority, unfettered by the strictures of bureaucracy, will have the flexibility to manage its affairs in a more businesslike way and to recruit and maintain high levels of staff and compensate them with better remuneration packages. It is designed to provide a significant increase in revenue collection to any administration in government."