The 2017 Tax Administration Diagnostic Assessment Tool (TADAT) performance assessment report prepared by the International Monetary Fund (IMF), has found weaknesses and deficiencies in our tax administration which can only be improved with the establishment of the T&T Revenue Authority (TTRA).
This was the claim made by Finance Minister Colm Imbert as he laid the report in Parliament yesterday.
The report gave the Inland Revenue Department (IRD) a poor grading of is taxation system in several areas, he said.
The report, which provides the IRD in strengthening domestic revenue mobilisation, was compiled by the IMF following a visit by a team to T&T from September 20 to October 3, 2017, and outlined strengths and weaknesses in our taxation system.
While Imbert said T&T had made substantial and significant progress in reforming our taxation system for improving domestic revenues, he noted that our system has been under-performing and continues to suffer from serious issues with its organisational structure, governance and non-compliance, which led to the People’s National Movement putting in place the TTRA.
The report focused on nine key performance outcome areas (POAs), ranging from timely filing of tax declarations, effective tax dispute resolutions, efficient revenue management, effective risk management and accountability and transparency.
Imbert said the POAs are informed by 28 high level indicators critical to tax administration performance, which used a four-point score system—ranging from A to D—with A being the highest and D being the lowest.
In the nine POA areas—integrity of the registered taxpayer base, effective risk management, supporting voluntary compliance, timely filing of tax declaration, timely payment of taxes, accurate reporting in declarations, effective tax dispute resolution, effective revenue management and accountability and transparency, T&T’s tax system got a rating of 17 Ds, one D+, eight Cs, one A and a B. Some of the Ds were given for timeliness of payments, use of electronic filing facilities and public perception of integrity. The A was received for our efficient collection system, Imbert said.
“This finding of inherent weaknesses in our tax system administration has not come as a surprise to us and we must make every effort to correct the deficiencies that have been identified in a timely manner.
“The proposed TTRA will embrace best practice standards in domestic tax administration. It will provide efficiency and domestic revenue mobilisation and fast and efficient quality of service to taxpayers, through simple, transparent and up-to-date procedures,” Imbert said.
Imbert said the report represents a useful baseline of tax administration on which the authority would now build.
MP Bhoe Tewarie asked Imbert how long it will take to plug the tax leakages.
Imbert said while several of the scores were Ds, it was imperative the TTRA be established. He said the report looked at weaknesses in the system and did not “go to the actual quantum of estimates that were loss.”