Independent Senator Charrise Seepersad said the TT Revenue Authority Bill, 2021, seeks to merge the Board of Inland Revenue and the Customs and Excise Division into one organisation, as part of an effort by government to boost tax administration and compliance in TT.
Speaking during debate on the bill in the Senate on Tuesday, Seepersad said everyone is affected when taxes are not paid. She asked whether a revenue authority where existing personnel are redeployed can produce the desired results.
“Clearly the work ethics in the organisations cannot continue in its present form. Training and retraining of vital skills in technology and customer service are essential if any gains are to be realised. Tax evasion is a major problem and is estimated to be between $12-$15 billion per year, split between corporation taxes ($5.1-$6.6 billion), income taxes ($5-$6 billion) and VAT ($1.9-$2.4 billion). In the second quarter of 2019, IMF experts estimated that the VAT compliance gap was about five per cent of GDP or about $8 billion dollars annually. This is because of inadequate assessment of taxpayers who are obligated to pay VAT.”
She said if revenue collection agencies can collect up to 50 per cent of what is not now collected in corporation tax, personal income tax, VAT, petroleum profit tax and customs duties, government revenue can increase by $3-$5 billion dollars annually.
Seepersad proposed several measures to improve tax collection, and stop tax leakage and avoidance. These included the establishment of an internal affairs unit and performance management systems, the development of a computerised database, records management systems, a review of existing systems, and an operational policy function. She said technology should be incorporated to remove the discretionary nature of some functions.
She said the overall quality of service was poor and there was an inability to recruit, train and retain staff. She called for greater efficiency and more effort to be put into discovering people who don’t comply, as tax registered compliant businesses were at a disadvantage.
Seepersad said the TTRA as it stood would be an arm of the Finance Ministry. She said she believed that the management and staff must be free and independent and proposed that the Board be appointed by the President rather than the Finance Minister.