Trinidad and Tobago Chamber: Improve tax collection

THE Trinidad and Tobago Chamber of Industry and Commerce has suggested that Government look at ways to improve tax collection and provide a comprehensive update on the state of the economy in the mid-year review of the 2023/2024 budget.

Finance Minister Colm Imbert is scheduled to present the mid-year review in the House of Representatives on June 7.

Before that sitting, the House's Standing Finance Committee will meet on June 3 to approve a $2.3 billion supplementation to the budget.

The committee will consider, among other major supplementations, an additional $570,900,000; $155,677,500; $527, 800,000; $495, 286, 000 and $144,200,000 for the ministries of Energy, Works and Transport, Public Utilities, Health and Education respectively.

The House will approve the $2.3 billion supplementation on June 7.

In a statement on May 28, the chamber said it hoped several key tax matters of interest to the public and other stakeholders would be addressed in the review.

The chamber recommended incentives to improve tax collection, specifically through interest and penalty waivers on arrears of tax payments for fiscal year 2022.

"These measures could enhance revenue collection, helping to offset any shortfalls in other areas of revenue generation."

The chamber hoped Imbert "will outline the Government's strategy to tackle the ongoing backlog of VAT (value added tax) refunds."

The chamber recommended issuing additional VAT bonds to expedite the repayment process.

It asked for an update on the property tax, pointing out an amendment earlier this year deferring the issuance of assessment notices by the Board of Inland Revenue (BIR) to June 30.

"We are keen to hear further updates on the implementation timeline as we approach this new deadline."

On the Revenue Authority (TTRA), the chamber said, "The establishment of the TTRA is a critical step in modernising the country's tax administration. We look forward to an update on the timeline and progress of this transition."

The chamber also hoped Imbert would provide insights into matters such as special economic zones legislation and transfer pricing in the review.

On the latter, the chamber said, "The potential introduction of transfer-pricing regulations is an important consideration for the future of tax policy in Trinidad and Tobago."

Transfer pricing is "an accounting practice that represents the price that one division in a company charges another division for goods and services provided."

By charging above or below the market price, companies can use transfer pricing to transfer profits and costs to other divisions internally to reduce their tax burden.