Tax transparency is the series of laws or rules to require businesses or people to disclose their income earned and taxes paid.

What re-ignited my interest in this was the recent Daily Mail article on the Florida lawsuit against Sandals Resorts International (SRI) by a former guest on allegations of tax fraud. The allegation is that the 12% accommodation tax charged to guests at Beaches in the Turks & Caicos Islands was not all remitted to the government, with a significant percentage of those monies kept by SRI (owners of Beaches).

SRI has denied those allegations and will be fighting the case strongly, but I wondered – just how did that guest get enough information to decide to file this lawsuit?

Recently in the TCI there has been serious political fallout arising from certain secret tax and duty concessions to SRI now being published, which once again shows just how imperative it is to have transparency. Without those secret deals having been disclosed, how would that person know they were being charged in the incorrect and dishonest way as alleged in their lawsuit?

So, tax transparency is of real value in fostering an informed and responsive public at the level of citizens, customers or even investors. For those reasons, tax transparency should be considered a public good.

Of course, that approach is alien to us, with our addiction to secrecy.

So, what is happening here, in our own hotels in T&T? Do we have similar secret tax/duty concessions and arrangements for the large hotels in T&T? Oh yes, we do. I formally wrote to the Board of Inland Revenue in October 2016 to ask in respect of the three State-owned hotels (Hilton Trinidad, Magdalena Grand and Hyatt Regency) whether the correct returns had been filed and on time and/or the correct taxes due had been paid; I also enquired if there had there been any query raised or matter investigated in relation to those taxes. I made it clear that no actual amounts of money paid, or owing was being requested, my queries were purely with respect to compliance. The BIR refused to provide the requested details on the grounds that those were exempt documents under the Freedom of Information Act.

There were recent reports of the striking statement from our Auditor General to a Joint Select Committee of our Parliament –

“…Auditor General Lorelly Pujadas said her office wanted to obtain information—such as VAT and hotel registration listing—from the Board of Inland Revenue to help track possible revenue loss in the country but was being blocked due to BIR’s law on confidentiality of information.

Pujadas said her office was not seeking names or taxpayers information but wanted the information to help get a better understanding of the country’s financial standing.

BIR chairman Allison Raphael said BIR’s law prevented certain information sharing since this could even undermine the tax collection process.

She noted tax payment was voluntary.

She said if the law was changed BIR would support it. Natasha Barrow from the Attorney General’s office said the Ministry contacted Finance Ministry to help resolve the matter but did not get a response…”

Now we have had two recent official disclosures of taxes paid by these hotels –

Senator Paula Gopee-Scoon on 19 March 2019 disclosed the taxes paid for Hilton Trinidad and Magdalena Grand in Tobago.

Minister Stuart Young on 30 April 2019 disclosed the VAT and PAYE only for Hyatt Regency –

“…Thank you very much, Madam President. On behalf of the Minister of Housing and Urban Development, I wish to advise that the total taxes collected from the Hyatt Regency Hotel Trinidad and Tobago, during the period 2015-2018 was $56,668,319.05. The Senate is asked to note that this total is comprised of VAT and PAYE. The VAT was $25,365,828.05, PAYE was $31,302,491…”
(pg 25)

All of which calls into question the earlier position taken by the Board of Inland Revenue to both my FoIA requests and those of the Auditor General, you see? Is it that disclosure of taxes paid is unlawful? Yes or No? If it is unlawful what are Ministers up to? Or is it that a Thing is what I say it Is?

Apart from the aspect of the legality of disclosure, one also has to look at the nature of the latest disclosure. So, UNC Senator Taharqa Obika asked the same question “…as to the amount of taxes and dividends collected…for each year during the period 2015 to 2018?…” in relation to the each of the three State-owned hotels.

The nature of the latest disclosure on taxes paid by Hyatt Regency can be better appreciated upon reconsideration of the timeline. Senator Gopee-Scoon’s 19 March 2019 disclosures on Hilton Trinidad and Magdalena Grand were notable on the latter for the combined figure for eleven years’ losses, which prevented any real analysis, as well as the omission of PAYE payments. Nonetheless, I used those details of taxes paid to estimate certain figures in a partial reconstruction of accounts which allowed for critical examination of these PPPs. Those three articles were published here as ‘Anything for a Buck‘

1. Part 1,
2. Part 2, and
3. Part 3.

Having disclosed the taxes paid for the first two PPPs, with the consequent commitment to give those details for the third, but with the unanticipated critique now emerging, evasive action was required. To fail or refuse to answer in relation to the putative flagship would be difficult but the likelihood of further searching comparisons was not a welcome one.

Minister Young’s statement of 30 April 2019 is given earlier. We have seen the Thing, here is its Meaning –

• Business Levy & Green Fund – No statement, so no estimate of Total Revenue is possible;
• Hotel Accommodation Tax – No statement, so no estimate of Room Revenue is possible;
• NIS – No statement, so no estimate of Total Income of staff is possible;
• Corporation Tax – No statement, so no estimate of Profit is possible;
• VAT – Combined figure given, so no analysis of VAT-able Revenue is possible;
• PAYE – Combined figure given, so no analysis of Allowable Income of staff is possible.

All in all, a victory for those who want to fake disclosure to prevent any real analysis of the nations’ business. Tax Transparency is an important, yet intangible, Public Good. These PPPs illustrate the point well, hence the title.

The Multilateral Ratings

The Organisation for Economic Cooperation & Development (OECD) has established a Global Forum for Transparency and Exchange of Information for Tax Purposes. That forum is stated to comprise 150 jurisdictions, plus of course the members of the European Union.

The Global Forum’s 2018 Progress Report, at its 23rd page, gives Overall Ratings against Peer Reviews as at 22nd November 2018 with the worst possible rating being ‘Non-Compliant‘ and the only country with that rating being Trinidad & Tobago. Well I tell you.