Tag: Colm Imbert

Income Tax Bill Passed on Friday, buying T&T time

In a drastic and desperate move, the Government butchered the controversial Income Tax (Amendment) Bill, deleting all clauses that required Opposition support to ensure its passage.

The bill, which the Government said was crucial to avoid this country becoming blacklisted and was necessary to ensure international financial transactions are not hampered, was passed just before 9 p.m. on Friday, with all Government members voting for it and all Opposition members voting against it. The final vote was 19-14.

This gives T&T some breathing room as it tries to meet deadlines for international tax regulation compliance.

Addressing the media at a press conference, Imbert said the he government will send the amended bill to the Global Forum on Transparency and Exchange of Information for Tax Purposes, letting them know it was the best that could have been done, and ask if it meets requirements. “We will most likely get a favourable response but we did the best we could,” Imbert said.

The vote in Parliament on Friday night met Global Forum’s requirement for the passage of the bill, he said, but Global Forum was only interested in proclaimed legislation.

Attorney General Faris Al-Rawi, also on Friday night, said T&T was able to “buy some time” by severing the bill in half. “As a result of the Opposition’s insistence that they will not support the legislation to treat with the Global Forum we specifically had to delete all the clauses of the bill that required a special majority,” Al-Rawi said.

Friday’s deadline was for the Financial Action Task Force (FATF) to re-evaluate T&T as a precursor for a meeting in February that will be held in Paris. FATF requires laws that allow law enforcement to access banking information that can highlight offences like fraud and proceeds of crime. In January, a group of evaluators from other member countries will review TT’s progress regarding the passage of the law.

The Government removed clauses 6-10 of the bill, which focused on demands from the Global Forum on Transparency and Exchange of Information for Tax Purposes, which requires sharing information between its 145 member countries.

The bill, inclusive of clauses 6-10, was a copy of the Foreign Account Tax Compliance Act (FATCA), a US government requirement passed after much debate in 2017. It required a special two-thirds majority to pass. Since it was unable to secure the Opposition’s support, the government, rather than pass no bill, watered it down so it could pass with a simple majority. The modified bill was passed 19-14 with no abstentions, six months after it was introduced.

Global Forum requires that TT not just pass but enact sections removed from the bill. Doing otherwise, Imbert said, will make T&T non-compliant with international laws and unable to receive the benefits of mutual sharing of information regarding money laundering and terrorism financing.

Al-Rawi said that the removal of the five clauses is not the end of the matter since the deleted clauses can make a comeback as part of any of the three laws needed to be passed to make the country eligible to sign an international treaty, similar to one attached to FATCA.

The three laws that need to be debated and enacted are the Income Tax (Amendment) Bill, the Mutual Administrative Assistance in Tax Matters Bill, and the Tax Information Exchange Agreements Bill. Unlike FATCA, he said, which is a bi-lateral arrangement with the US, this treaty can only be signed after the all the bills are made law.

Since on­ly parts of the In­come Tax Amend­ment Bill were passed, Gov­ern­ment says the rest of the bill con­cern­ing Glob­al Fo­rum as­pects will be brought back to Par­lia­ment ear­ly next year.

And for this sec­ond round, the T&T Cham­ber has sent a stern mes­sage to both Gov­ern­ment and Op­po­si­tion: no re­peat of the re­cent long-wind­ed process re­gard­ing the bill.

“No grand­stand­ing and de­lays ahead – please,” T&T Cham­ber CEO Gabriel Faria added.

Im­bert said,”Over the last month it be­came ob­vi­ous the Op­po­si­tion wouldn’t sup­port the bill and one of the rea­sons ap­peared to be the clause al­low­ing po­lice eas­i­er ac­cess to tax in­for­ma­tion from In­land Rev­enue. But we agreed to their call to add ju­di­cial su­per­vi­sion in the sit­u­a­tion.

“That clause was one of CFATF’s rec­om­men­da­tions and we were able to pass that with a sim­ple ma­jor­i­ty. If we didn’t, CFATF would have black­list­ed us. It’s iron­ic that the clause that was passed with sim­ple ma­jor­i­ty vote was one they had con­cerns about – they shot them­selves in the foot. The claus­es which re­quired Op­po­si­tion votes for pas­sage and which we delet­ed were the in­for­ma­tion as­pects Glob­al Fo­rum (GF) re­quired.”

Im­bert added, “We’ll now go to the GF on their as­pects. They’re com­ing in Jan­u­ary and we’ll get in­for­ma­tion and I’m sure we’ll have to do the bill over on their mat­ters. I’m sure we’ll be back in Par­lia­ment with it by Feb­ru­ary. Hope­ful­ly, there’ll be no dras­tic sit­u­a­tions.”

Cham­ber CEO Faria, who ex­pressed hap­pi­ness at the bill’s pas­sage, said they were very con­cerned at the wast­ed en­er­gy in the mat­ter.

“While Gov­ern­ment made some con­ces­sions, if both par­ties had ad­dressed it prop­er­ly T&T would be much more ef­fi­cient. So more ma­tu­ri­ty needs to be dis­played – don’t wait un­til the last minute to ad­dress is­sues. That’s why we’re in sit­u­a­tions like Petrotrin and WASA,” Faria said.

“It’s very stress­ful in an al­ready dif­fi­cult cli­mate for busi­ness and con­sumers. Next rounds it must be bet­ter. Mem­bers have sent me copies of let­ters from banks who can no longer main­tain ac­counts due to the coun­try they’re in.”