Minister: Spending can’t be cut

Robinson-Regis was delivering the feature address at a Post Budget Forum held by the American Chamber of Commerce of Trinidad and Tobago at the Hyatt Regency. She recalled Finance Minister Colm Imbert’s Budget statement that since 2011 this country had lost an estimated US$1.4 billion a year from diversion of natural gas sales to higher priced markets and said it was widely known that such illegal pricing arrangements have become a major source of revenue leakage in commodity producing countries.

“Indeed, according to the Organisation for Economic Co-Operation and Development (OECD) worldwide revenue losses from transfer pricing ranged between four to ten percent of global corporate income tax revenues.” She said “we just can’t go on this way.” She quoted from a report prepared by the accounting firm of Ernst and Young which said that in the country’s present economic circumstances it could not afford to continue losing such revenues and hoped that the long-promised transfer pricing legislation would be finally enacted as a matter of urgency. She said the government had engaged the Inter-American Centre for Tax Administration to produce a policy and legislation to reduce “this leakage of much needed government revenue.” She added that there was a clear need for the Board of Inland Revenue to do its job more efficiently.

Robi n son-Reg i s said the problem of tax avoidance was one which had been plaguing the country for a long time and it was inevitable that the transfer pricing problem would develop.

She hoped that over the next few months the government will be able to develop and bring to Parliament the necessary legislation to bring the Revenue Authority into being in the shortest possible time.

She spoke about the Budget’s proposal for public/private partnerships and said the government is prepared to make wider use of such partnerships, adding that the first one is likely to be used for making the Couva Hospital and Training Facility operational with a p rivate operator managing, operating and maintaining the hospital “or specific elements of it.