PORT OF SPAIN, Trinidad, Friday March 23, 2018 – The International Monetary Fund (IMF) has found several deficiencies and weaknesses in Trinidad and Tobago’s tax administration system.
That was revealed in the findings of an assessment carried out by the Washington-based lending agency using the Tax Administration Diagnostic Assessment Tool (TADAT).
The IMF said the Inland Revenue Division’s (IRD) reform needs are substantial. Among the many deficiencies identified were: the unreliable state of the taxpayer registration database; delays in processing of accounting transactions; and weak compliance risk management methodologies that severely hamper IRD operations, limits its capacity to improve taxpayer compliance and generate additional tax revenues.
“While the assessment team observed strengths in the use of third party data to support audits, a well-structured tax dispute resolution process, and a relatively sound tax administration IT system, there are substantial weaknesses that impact all outcome areas,” the (TADAT) performance assessment report stated.
Those weaknesses include: an inaccurate taxpayer registration database with uncertainty regarding the number of active taxpayers; inaccurate taxpayer accounts arising from delays in processing accounting transactions; under-developed compliance management methodology; inefficient business processes; and general shortage of technical staff.
“All these issues impact on the credibility, reliability and ready availability of tax administration data,” the report said.
Given the deficiencies identified, the IMF team said it was unable to assess the true performance situation in a number of areas.
In 18 of the 28 indicators, Trinidad and Tobago was graded ‘D’ – the lowest level of performance which denotes inadequate performance or insufficient information to determine and score the level of performance.
An ‘A’ grade, which denotes performance that meets or exceeds international good practice, was given in two areas: use of efficient collection systems and existence of an independent, workable, and graduated dispute resolution process.