Derek Achong
Senior Reporter
[emailprotected]
The Court of Appeal has agreed to stay the implementation of the long-touted T&T Revenue Authority (TTRA) until at least September while the Public Services Association (PSA) pursues its final appeal over its consecutive losses in its lawsuit before the local courts.
Appellate Judges Mark Mohammed, Charmaine Pemberton, and Mira Dean-Armorer granted the stay yesterday, as they also gave the union and its member Terisa Dhoray conditional leave to pursue their final appeal before the United Kingdom-based Privy Council.
During the hearing, Senior Counsel Douglas Mendes, who led the legal team for the Office of the Attorney General, noted that Finance Minister Colm Imbert was only willing to consent to hold off on implementation until the end of the month.
Imbert had previously agreed to hold out on the move while the local courts were mulling over the substantive case, even after both courts had refused the PSA, through Dhoray, a similar stay.
Mendes also pointed out that if implementation went ahead as planned and the PSA and Dhoray eventually succeeded in their appeal, public servants, who stand to be affected by the move, would be reinstated to their original positions.
In a recently filed affidavit in the case, Imbert stated that the TTRA is essential to the collection of increased tax revenue. “In fact, unless additional tax revenue can be collected through the improvements in tax administration that will come with a fully operational Revenue Authority, the Government will soon be faced with very difficult choices in terms of maintaining the current levels of subsidies, grants, free services, and social programmes,” Imbert said.
Estimating the annual tax gap between estimated and actual revenue to be between $5 billion and $10 billion, Imbert said, “In light of present oil and gas prices on the international market and the likelihood that they will not increase significantly in the near future, the reduction of the tax gap through increased collection of taxes is likely to be the only way of reducing the budget deficit and achieving fiscal consolidation while at the same time maintaining present levels of government expenditure.”
In granting the limited stay, Justice Mohammed noted that he and his colleagues shared Imbert’s concerns over the indefinite halt to the process pending the appeal. However, he noted that a stay until September 25 would be conducive to the ease of administration, would facilitate the administration of noting that the case was prioritised by the local courts, Justice Mohammed and his colleagues expressed confidence that the Privy Council would treat it with the same degree of urgency. and was in the public’s interest.
Noting that the case was prioritised by the local courts, Justice Mohammed and his colleagues expressed confidence that the Privy Council would treat it with the same degree of urgency. The appeal panel is expected to consider possibly extending the stay when the case comes up for hearing on the deadline for the parties to provide an update on the status of the appeal.
Union takes issue with Imbert’s claims
In a press release issued to announce the stay, the PSA took issue with Imbert’s claims over the need for the TTRA to manage taxation and consequently address revenue shortfall issues.
“Workers are already barely surviving and living paycheque to paycheque; small and medium businesses are closing at a rapid rate; and there is severe unemployment and underemployment,” it said.
“Trying to squeeze more tax out of our financially beleaguered workforce through the TTRA via property tax is unfair, harsh, and oppressive,” it added.
In the lawsuit, the PSA, through Dhoray, challenged the constitutional validity of the legislation, which seeks to replace the Customs and Excise Division (CED) and the Inland Revenue Division (IRD) with the TTRA. The lawsuit specifically focused on Section 18 of the T&T Revenue Act, which was proclaimed by President Christine Kangaloo on April 24 last year.
The section gives public servants three months to decide on their future employment upon the operationalisation of the TTRA. Affected public servants have the choice to voluntarily resign from the Public Service, accept a transfer to the TTRA, or be transferred to another office in the Public Service.
The implementation was initially expected to take place in August, last year, but was deferred by Finance Minister Colm Imbert to December based on the case. It was subsequently deferred to March to facilitate the appeal before the Court of Appeal.
Dhoray’s lawyers contended that certain segments of the legislation are unconstitutional as they seek to interfere with the terms and conditions of employment of public servants currently assigned to the CED and IRD. She also claimed that the Government did not have the power to delegate its tax revenue collection duties. In its defence, the Government has claimed that tax collection could be delegated once guidelines are provided by Parliament.
In November, last year, Justice Westmin James dismissed Dhoray’s legal challenge. While he noted that taxation is a key source of a government’s revenue and that the process of assessing and collecting taxes is essential, he also noted that there are currently instances of private entities being able to collect taxes on the government’s behalf.
He also pointed out that several foreign countries have set up similar specialist bodies to deal with the “complexities” of modern taxation. In upholding Justice James’ judgment late last month, the appeal panel ruled that while enforcement is a “core government function” that cannot be delegated, the assessment and collection of tax are not.
“We observe that the assessment which the authority is empowered to conduct is, in reality, an arithmetical stage of the process and does not confer on the assessor any coercive power,” Justice Dean-Armorer, who wrote the judgment, said.
“Collection is also not coercive and is generally voluntary,” she added. Justice Dean-Armorer noted that enforcement will still be performed by public servants, who fall under the remit of the Public Service Commission (PSC).
“We therefore hold that there was no breach of the implied term that core functions should remain under the supervision of the PSC,” she said.
Dhoray was represented by Anand Ramlogan, SC, Jayanti Lutchmedial, Kent Samlal, Robert Abdool-Mitchell, Natasha Bisram, Vishaal Siewsaran, and Ganesh Saroop. The authority and the Office of the Attorney General were also represented by Simon de la Bastide, Svetlana Dass, and Leann Thomas.
