Tax Guide for T&T

Tax Guide

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TAX, if not done properly can make a big mess quickly, especially in tough economic times. While the government needs to fill its coffers to keep things going, like roads, security, health care, education, pensions, etc. The first obligation is to ensure that this resource is used wisely, and not squandered or stolen. There must be a philosophy behind the way that taxes are structured so that in the long run, the country benefits as a whole and can move forward together.

 

Apart from the lower income earners, where there is a zero income tax rate for up to TT$72,000 per year, the playing field is unevenly biased towards big businesses and the conglomerates. This may be due to where the political parties get their funding from. While in opposition they would always tell us about putting legislation in place to make party financing more transparent. But once in power, that goes out the door and its the new opposition’s turn to make such calls, and this game goes on at the country’s expense.

 

A former Prime Minister spoke of a “Parasitic Oligarchy” that was pulling all of the strings. He has since rode off into the sunset, but the oligarchy is still there, making sure that their interests are served. They make sure that certain things just never get done.

 

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As a whole in order to move this country forward in a meaningful way, here are my Taxation Recommendations:

 

[1] Business Levy and Green Fund

 

These were introduced, because the Government found that businesses were reporting losses continually, but still continuing to grow and expand. So instead of auditing these businesses and getting to the bottom of their real financial status, they took the easy way out and made sure that all businesses would pay some tax. This was the lazy tax man’s solution.

 

The problem with this tax is that if a small family business is genuinely having financial woes – the penalties and interests pile up quickly and will force the business to close its doors worsening the unemployment problem. The new administration in a stroke of brilliance have decided to increase these taxes by 200%. So if you were just scraping along before, you will drown now for sure. They may be surprised to find that at the end of the year the extra revenue expected never materialized.

 

My recommendation: Cancel this increase, get your house in order and move towards eliminating this altogether. Public servants have secure jobs and get reasonably good pay – they need to be out in the field and do more audits.

 

[2] V.A.T.

 

Here the movement was very slick, reduce it from 15% to 12.5%, but decrease the high volume of zero rated items. So the nation feels comforted that the dreaded VAT is being reduced, only to realize that they are really now paying more VAT.

 

My recommendation: Instead of playing games with the population you implement a dual VAT rate plus Zero Rating as follows:

 

Zero Rated Items: Basic Food, Drink, Books and necessities

 

10% VAT – Other food items, Clothes, Construction Materials

 

20% VAT – Vehicles, Consumer Electronics, Computers, Cellular Phones, Furniture and Appliances

 

The 20% may seem high, but most people can survive without another huge Flat Screen TV, or ensuring that they have the latest series of new vehicle. It will serve to reduce consumerism and reduce foreign exchange flight.

 

[3] Tobacco and Alcohol

 

Simply put, these products kill people, and burden the economy with medical expenses. Less alcoholics and cancer patients will be a very good thing. The nation will be better off without them.

 

My recommendation: Raise Import Duties, Production Duties and Taxes on these products without mercy. Also increase the Bar License fees dramatically. For such a small country, there are too many rum shops.

 

[4] Motor Vehicles

 

Although I dealt with this in VAT, because we really need to curb the amount of new vehicles coming onto the roads and conserve foreign exchange, this needs a second look.

 

My recommendation: Increase motor vehicle taxes, with a higher rate for luxury high-end vehicles.

 

[5] Conglomeration Tax

 

In this small island, the conglomerates have an unfair advantage and are causing stagnation and the elimination of the emergence of new entrepreneurs. These entrepreneurs are the ones that can help to diversify the economy. This is what we desperately need. Additionally, when these conglomerates crash, the whole nation has to bear their burden.

 

My recommendation: Level the playing field – conglomerates should pay an extra 5% in sales tax off the top.

 

[6] Property Tax

 

Everyone should be able to have somewhere to live comfortably, without the worry of not being able to pay their property tax, this is especially true for retired persons.

 

My recommendation:

[a] Your home and living space 0%

[b] Additional properties owned by individual or company 3%

[c] Agricultural land in production 0%

[d] Agricultural land not in production 2%

[e] Commercial properties/rentalĀ  6%

 

CONCLUSION:

 

Please comment, like our Facebook Page and share your ideas, I think that government can use the help.

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Posted by: Trini 2D Bone on