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Tuesday, May 20, 2025

Billions of T&T’s revenue not being audited

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718 days ago
20230601
Offices of the Board of Inland Revenue in Port of Spain.

Offices of the Board of Inland Revenue in Port of Spain.

An 11-year dis­pute be­tween T&T’s Au­di­tor Gen­er­al’s De­part­ment and its pre­mier tax col­lec­tion agency–the In­land Rev­enue Di­vi­sion, al­so called the Board of In­land Rev­enue–re­sult­ed in $36.52 bil­lion in rev­enue col­lect­ed by the BIR in the 2022 fis­cal year not be­ing au­dit­ed.

This in­for­ma­tion is con­tained in the Au­di­tor Gen­er­al’s 2022 re­port on the pub­lic ac­counts of T&T, which dis­clos­es that the $36.52 bil­lion col­lect­ed by the BIR is 62.2 per cent of the $58.71 bil­lion that was the to­tal rev­enue gen­er­at­ed in T&T in the 2022 fis­cal year.

The 2022 re­port of the Au­di­tor Gen­er­al’s De­part­ment al­so dis­clos­es that the con­sol­i­dat­ed state­ment of ar­rears of rev­enue owed to the Gov­ern­ment, but not col­lect­ed in the 2022 fis­cal year, amount­ed to $48.92 bil­lion. Of that amount, oil com­pa­nies had $18.39 bil­lion in ar­rears, oth­er com­pa­nies $12.34 bil­lion and in­di­vid­u­als $1.61 bil­lion.

The dis­pute be­tween the Au­di­tor Gen­er­al’s De­part­ment and the BIR has arisen be­cause T&T’s 1976 Re­pub­lic Con­sti­tu­tion, at sec­tion 116 (2), states that the De­part­ment “shall have ac­cess to all books, records, re­turns and oth­er doc­u­ments” re­lat­ing to the pub­lic ac­counts of T&T and of all of­fi­cers, Courts and au­thor­i­ties in the coun­try.

The Ex­che­quer and Au­dit Act, at sec­tion 10, ex­pands the Au­di­tor Gen­er­al’s right of ac­cess to in­clude ex­pla­na­tions and in­for­ma­tion as well as ac­cess to all State prop­er­ty.

Sec­tion 10 (2) states: “In the ex­er­cise of his du­ties un­der this Act the Au­di­tor Gen­er­al, or any per­son du­ly au­tho­rised by him in writ­ing, shall have ac­cess to all records, books, vouch­ers, doc­u­ments, cash, stamps, se­cu­ri­ties, stores or oth­er State prop­er­ty in the pos­ses­sion of any of­fi­cer.”

While the Au­di­tor Gen­er­al’s De­part­ment has a man­date to ac­cess tax­pay­ers’ in­for­ma­tion col­lect­ed by the BIR, T&T’s In­come Tax Act, at sec­tion 4, re­quires every per­son em­ployed by the BIR to treat as “se­cret and con­fi­den­tial,” all doc­u­ments, in­for­ma­tion, re­turns, as­sess­ment lists, and copies of such lists re­lat­ing to the in­come or items of the in­come of any per­son.

Sec­tion 4 (2) of the In­come Tax Act makes it an of­fence for any BIR em­ploy­ee with tax­pay­ers’ in­for­ma­tion to com­mu­ni­cate or at­tempt to com­mu­ni­cate such in­for­ma­tion “oth­er than a per­son to whom he is au­tho­rised by the Pres­i­dent to com­mu­ni­cate it.”

Asked last week if a sim­ple res­o­lu­tion to the dis­pute would be for the Pres­i­dent to au­tho­rise the BIR to com­mu­ni­cate tax­pay­ers’ in­for­ma­tion to the Au­di­tor Gen­er­al’s De­part­ment, cur­rent Au­di­tor Gen­er­al, Lorel­ly Pu­jadas, re­spond­ed: “Please re­fer to Act No. 18 of 2018.”

Act No. 18 of 2018 is the In­come Tax (Amend­ment) Act. The Act man­dates BIR em­ploy­ees to pro­vide tax­pay­er in­for­ma­tion to:

• The Di­rec­tor of the Fi­nan­cial In­tel­li­gence Unit “sole­ly for the pur­pose of en­abling the FIU to do its analy­sis un­der the Fi­nan­cial In­tel­li­gence Unit of Trinidad and To­ba­go Act;

• A po­lice of­fice of the rank of Su­per­in­ten­dent or above re­spon­si­ble for fi­nan­cial in­ves­ti­ga­tions or fraud, “where such in­for­ma­tion is re­quired for the pur­pose of in­ves­ti­gat­ing whether an of­fence—(i) un­der the Pro­ceeds of Crime Act; (ii) un­der the An­ti -Ter­ror­ism Act; (iii) un­der the Pre­ven­tion of Cor­rup­tion Act; or (iv) in­volv­ing fraud or dis­hon­esty,

But the Act does not ex­pand the re­cip­i­ents of tax­pay­ers’ in­for­ma­tion to in­clude the Au­di­tor Gen­er­al’s De­part­ment.

The 2022 Au­di­tor Gen­er­al’s Re­port states: “To this end, the in­ter­pre­ta­tion and ap­pli­ca­tion by the Board of In­land Rev­enue of the se­cre­cy pro­vi­sions of sec­tion 4 of the In­come Tax Act have con­tin­ued to pose a chal­lenge to the au­dit of rev­enue at the In­land Rev­enue Di­vi­sion.”

Ac­cord­ing to the Re­port, fol­low­ing the rec­om­men­da­tion of a Pub­lic Ac­counts Com­mit­tee in the first quar­ter of 2017, the chair­man of the Board of In­land Rev­enue and the then Au­di­tor Gen­er­al met on sev­er­al oc­ca­sions dur­ing the course of the fi­nan­cial years 2017 and 2018 un­der the aus­pices of the Min­istry of the At­tor­ney Gen­er­al and Le­gal Af­fairs.

The Re­port states that the Au­di­tor Gen­er­al sub­mit­ted pro­pos­als for the con­sid­er­a­tion of the At­tor­ney Gen­er­al, but those pro­pos­als were not ac­cept­ed by the In­land Rev­enue Di­vi­sion.

“Due to the in­abil­i­ty of the par­ties in­volved to come to a con­sen­sus, the Au­di­tor Gen­er­al in 2019 and 2020 re­quest­ed the At­tor­ney Gen­er­al to file an in­ter­pre­ta­tion sum­mons for the in­ter­pre­ta­tion of sec­tion 4 of the In­come Tax Act,” ac­cord­ing to the 2022 Re­port of the Au­di­tor Gen­er­al.

T&T’s At­tor­ney Gen­er­al from Sep­tem­ber 2015 to March 2022 was Faris al-Rawi, the cur­rent Min­is­ter of Lo­cal Gov­ern­ment and Rur­al De­vel­op­ment. It is un­clear from the Re­port whether al-Rawi ac­com­mo­dat­ed the re­quests from the Au­di­tor Gen­er­al in 2019 and 2020.

Regi­nald Ar­mour, SC, was ap­point­ed as At­tor­ney Gen­er­al on March 16, 2022.

“Sub­se­quent­ly, on March 22, 2022, the Au­di­tor Gen­er­al wrote to the At­tor­ney Gen­er­al de­tail­ing the his­to­ry of the ten-year-old un­re­solved le­gal mat­ter. The At­tor­ney Gen­er­al’s as­sis­tance was re­quest­ed in the form of an in­ter­pre­ta­tion sum­mons or any oth­er ac­tion the At­tor­ney Gen­er­al may see that can lead to the Au­di­tor Gen­er­al ful­fill­ing his Con­sti­tu­tion­al man­date.

“On April 11, 2023 the At­tor­ney Gen­er­al con­firmed his Of­fice would make an ap­pli­ca­tion to the Supreme Court for an in­ter­pre­ta­tion of the se­cre­cy pro­vi­sions of sec­tion 4 of the In­come Tax Act, Chap­ter 75:01. How­ev­er, at the time of this re­port the se­cre­cy pro­vi­sions re­main as a lim­i­ta­tion,” Pu­jadas wrote, in the 2022 Au­di­tor Gen­er­al’s Re­port. On the web­site of the Au­di­tor Gen­er­al’s De­part­ment, the 2022 Re­port is dat­ed May 4, 2023.

Ques­tioned on whether his Of­fice had made the ap­pli­ca­tion to the Court for the in­ter­pre­ta­tion of sec­tion 4 of the In­come Tax Act, and why it took near­ly 13 months to re­spond to the Au­di­tor Gen­er­al’s March 22, 2022 let­ter, Ar­mour re­spond­ed: “Con­sis­tent with the com­mit­ment that I made in April 2023 to the Au­di­tor Gen­er­al, as she re­ports, my Of­fice has briefed Se­nior Coun­sel to take con­duct of this.”


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