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Opposition, independent senators raise concerns about repealing TTRA bill

THE TT Revenue Authority Repeal Bill, otherwise known as "An Act to repeal the Trinidad and Tobago Revenue Authority Act, 2021 (Act No. 17 of 2021)" was passed in the Senate on June 27. Fifteen government senators voted for it, 13 voted against it – including six opposition senators and seven independent senators – and two independent senators abstained. Early in the debate, government senator Vishnu Dhanpaul said creating the TT Revenue Authority (TTRA) had been an exercise in frustration as various governments had argued about bringing it to fruition since 2002. Speaking in his maiden contribution to the Senate on June 27 during the debate on the bill, Dhanpaul said he had worked with every minister of finance between 1991 and 2021 and was accustomed to changes in policy. He said in 2017, the International Monetary Fund produced a technical administrative diagnostic document which provided advice to government. He said among the strengths identified by the document were a relatively good tax administration and ICT platform, automated cross-matching of information from a wide range of third-party sources, efficient arrangement for collecting taxes such as withholding at source payment for income taxes, a graduated mechanism of administrative and judicial review, significant contribution to the tax revenue forecasting and estimation process and regular monitoring of revenue performance. He said among the weaknesses were the low integrity of the taxpayer registration database, on-time filing of payment rates could not be established with certainty, compliance with management practice was underdeveloped, a centralised risk-based audit case selection process that allowed rollover of cases from previous years and placed taxpayers under permanent audit control, limited use of electronic services for audit control, and others. He said the action by the Public Service Association in 2014 where the workers did not go into the premises for six months had impacted the workers’ psyche and the Board of Inland Revenue had not recovered. Dhanpaul said several reports said there was a $10 billion revenue gap which could be closed if the TTRA was implemented. He said if the Finance Minister could close the revenue gap by the end of 2027, he would come back to the Senate and apologise profusely to the minister. Independent senator Anthony Vieira said the Inland Revenue and Customs and Excise Divisions were out of date, underperforming, antiquated, and in need of replacement. He said the TT Revenue Authority, while flawed, was the best option for TT’s revenue collection system. Later during his own contribution to the debate, Vieira said the Board of Inland Revenue had long been an underperforming institution. “This is supported by evidence over the last two decades. "Poor systems, outdated legal infrastructure and human resource inefficiencies have all been repeatedly identified as structural deficiencies within the BIR. Evidence includes outdated operational systems, as it relies mainly on paper-based processing which is inefficient and prone to delays and error. The IT infrastructure is fragmented and outdated, limiting its ability to detect tax evasion or automatic key processes. “The BIR pre-dates modern tax administration standards, making it hard to enforce compliance or conduct high-value transactions in real time. "The absence of a unified tax code and gaps in transfer pricing, anti-avoidance measures and real-time filing mechanisms are recurrent issues. There is no modern HR framework for performance evaluation or promotion based on that. The BIR is constrained by public service regulation that limit its ability to recruit and retain highly specialised tax personnel or forensic auditors.” He said the TTRA act proposed solutions to those problems, making the authority autonomous and no longer tied to general constraints. He said repealing the act was going in the wrong direction, with the repeal being at its worst politically motivated and at best regressive. Vieira said the concerns raised by the then opposition were valid and could have been better handled. He said he did not accept that the TTRA was going to be weaponised against citizens and said allegations of data targeting were not only incorrect but unfair. Independent senator Alicia Lalite-Ettienne, in her maiden Senate contribution, called for the TTRA act to be revised, not repealed. She said the country could not function on an inefficient tax-collection system, including citizens paying their taxes. She called on the government to use the results from the strategic plan for the entity to make it what was needed. “There were glitches. Nothing comes out perfect in the first instance. You have a chance to correct the glitches, you can take those recommendations and correct them. I have been researching and seeing so much about the main source of the problem in the TTRA, and you’re talking about staffing and HR and training. What’s the common denominator? “Everybody points back to the Service Commission and its many inefficiencies and delays, and staffing, training and compensation. Blaming the TTRA for its inefficiencies is incorrect because if the Service Commission has their obligations and not filling it in a timely manner, you will have a ripple effect. Have you thought about ideas to help the Service Commission to become more efficient and effective?” Lalite-Ettienne said the TTRA should not be about what government was in power, but having an efficient tax collection system. 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