Election Goody No.1; amnesty extension!

Hurray … election goodies have begun. The income tax amnesty has been extended to September 30th. But like an ungrateful voter, my response is a big steups. Unless the extension of time is accompanied by the release of refund cheques, we are all in the same place.

The tax amnesty was conceptualized to provide an opportunity for big businesses to regularize their outstanding taxes before the Tax Authority begins to focus on recovery. For the amnesty to be effective, the timely release of refunds is critical.

There is hesitancy to take advantage of the amnesty because business and people simply do not have the money to pay their taxes. If businesses did not have the funds in time for Monday 16, it is unlikely that they can raise those funds for 30 September for this amnesty to make sense.

The amnesty should be extended to October 31st in keeping with the statutory deadline established by the Registrar of Companies.  This would give the government the opportunity to pay all refunds, which some businesses are waiting for in order to pay the same government.

Daily businesses face impatient bankers as they negotiate overdrafts. They burn through cash reserves to pay those overdraft costs, which are incurred from not getting timely refunds. They live in hope that their creditor’s list will be reduced by one—the GOTT.

If a business cannot attach a cheque to the tax submission, then they are at the same place as prior to the extension of the amnesty. A little common sense will tell you that if you pay me and I pay you back and do some other things with the money you refunded me, the multiplier effect will kick in and make a difference.

There was a time when holding a government contract could back your overdraft, but not anymore. There is now a polite question: “Do you have any other contracts?” If the answer is no, then you’re sure to be sent in another direction to find some other promising projects.

The business model of relying on government contracts is unsustainable. We have learned that no matter who is in power if you or your business is not supportive of the government, you will be victimized and receive the polite regret letter indicating that your submission or proposal was not successful.

The last six years in this country has seen no wiggle room to run any business. The banks and financial institutions are ‘wetting’ us with interest and service charges. Those businesses with interlocking directorships are taken care of with preferential treatment, but the ‘Ramlal Public’ enterprises are doing financial somersaults to honour their obligations.

The minister of finance must understand that for a number of businesses in the present economic climate, the timely release of the refunds is critical to them staying afloat. If the minister really understood the hardship businesses are experiencing, he would release the funds to pay outstanding refunds. The immediate impact would be an injection of funds into the spending stream. The second benefit would be that the government’s coffers would be immediately increased because the funds would be available to pay outstanding taxes and benefit from the amnesty.

Only an uninformed person would ignore this amnesty and allow their interest rates to increase. This amnesty is a gift horse but there are constraints, which in some instances can only be relieved by the government doing the responsible thing and paying our tax refunds, including VAT.

This two-week extension is another example of fiddling and fishing for election likes.

Opportunity in the Collapse of Chinese Contract!

On the fourth anniversary of PNM’s election victory a game changer collapses. This collapse of a significant plank upon which the Keith Rowley-led administration placed its development programme is significant. I’m not surprised because we keep focussing on quick fixes in preference to the hard work of rebuilding our society from the ground up.  Somebody needs to start believing in us again and the entity best suited to channel that belief is the person in the position of Prime Minister.  With twelve months left in his formal administration, his game-changer is not evident, but his failures are glaring.

Courtesy the Trinidad Express 06/09/19

Trinidad and Tobago is a hard place to repair but someone has to begin somewhere, and the issue of productivity is clearly the best place to start. It’s not an easy solution, but it is the largest obstacle for us to begin chipping away at in quest to solve our problems.  The GoTT could have met with the contractors and shared their vision for providing affordable housing, maybe they would have looked at the stock of unoccupied houses to identify how to make them liveable.  Under a strong facilitator, they would have been able to come up with a collective strategy to achieve the objective. If the contractors came up with a strategy which they see as fair and equitable, they would be inspired to engage the hearts and minds of the tradesmen, labourers and suppliers.  There would be a ripple effect, but this couldn’t work without a gradual decrease in our make-work programmes. It means the country would be starting to rebuild from the ground up. If you could find the US$72 million to fund a Chinese building programme, then it can be found to fund a locally led building initiative which would suck up idle hands, transform them into productive workers and get money circulating again.  

In order to achieve this goal of building 5,000 housing units, it would have been necessary to engage in some level of training and retraining of persons in the construction sector.  This would have been an opportunity to improve competency across the board and to get people believing again that we can help ourselves. It would have been an opportunity to break the cycle of learned helplessness which I come across daily.  People who quickly say “ah dunno” and move on.

Trinidad & Tobago needs a transformation strategy and a transformational leader.  The fact that the Prime Minister has instructed the HDC to re-tender is laudable but not enough.  If you have to go out to re-tender then something went terribly wrong and the persons responsible must be held to account.  Someone seems to have put an “approved” sign to a contract which was not in the country’s interest.  Had it not been for the late vigilance of the Cabinet, we would have been “up a creek without a paddle”. Again, it is even more damning when the Prime Minister can say that parts of the contract were unacceptable both “structurally and legally”.  It is incumbent on the Prime Minister to demonstrate his commitment to accountability and take action. If the accountable person is too close to be removed by the Prime Minister, then he must remove himself if only for the symbolic demonstration that he will do the right thing because it is the right thing to do.

The opportunity here is to demonstrate that the right thing will be done in the interest of the country and we believe in our people’s capacity to act in our collective interest at all times.  With twelve months to go, Prime Minister Rowley needs to carefully review his options and engage the wider population in identifying a way forward that is sustainable and outcome focussed. 

Private And Public Sectors Competing For “Dead Last” Title In Efficiency 

Private or public sector, inefficiency and lack of productivity is rampant.  An ongoing experience with (Price Waterhouse Coopers) PwC since 2012 has left me challenging the statement that public servants are lazy.  I am beginning to conclude that the lack of productivity observed in the public service is equally rampant in the private sector. The simplest of transactions take an inordinately long time and quality customer service is the exception rather than the rule.  

My current angst is with the reputable firm PwC.  In 2012 they were invited to carry out the voluntary liquidation of the Caribbean Games Company (CG09).  Seven years later, there is one outstanding matter holding back the finalization of the Liquidation and PwC who is being paid monthly has attached no urgency to wrapping up the Games.  As a matter of fact, the liquidator is actively ignoring any approaches on this issue. Contrast this seven year timeline with the PwC British website which boasts that that complex liquidations take an average of 24 to 30 months.

The matter preventing the completion of this liquidation is whether or not the board members should be remunerated for their service.  It is a reasonable expectation that service on a Board would attract some form of remuneration unless explicitly stated to the contrary.  At the last meeting with the liquidator in May 2019, the following statement: “… a total payment of more than a million dollars to seven Directors for Games which never came off is unconscionable…” raised the ire of the following members: Mrs. Dennise Demming, Dr. Iva Gloudon, Dr. Arthur Potts, Mr. David O Brien, Mr. Douglas Camacho and Mr. Mushtaque Mohammed.

For the record, under the leadership of former Minister of Health, Mr. Jerry Narace, Trinidad & Tobago created history by being the only country to cancel any activity because of the H1N1 scare and this cancellation occurred 6 weeks prior to the staging of the Games.  The board had been working diligently for the 30 months between their appointment and this cancellation.

The liquidator has the power to make a final determination but to take seven years to make that decision is unconscionable and unproductive.  Further, who is responsible at PwC to question why a simple voluntary liquidation should take almost seven years and counting.  If a reputable organization like PwC can’t get a simple voluntary liquidation completed in a reasonable time, then Trinidad & Tobago is doomed!