UWI economists Dr Marlene Attzs and Dr Vaalmiki Arjoon have said there needs to be greater efficiency in tax collection to ensure the country benefits from maximum revenues.

Attzs and Arjoon gave their views in separate statements to Newsday on May 28.

Attzs said, "On the issue of the system of tax collection, recent reports of businessmen owing large sums of unpaid taxes to the BIR supports my view there is inefficiency in collection of taxes, since it is very unlikely that these large sums of outstanding taxes are of recent vintage."

Attzs said this begs the question as to what enforcement mechanisms are in place.

"As we speak of greater digitalisation in the economy, including digitalisation to facilitate ease of doing business, are the electronic systems for tax collections in place and user-friendly?"

She added that leakages in the system of tax collection "result in lower-than-anticipated tax revenues."

Attzs identified tax collection as but one aspect of the bigger picture of revenue generation which should be addressed in the mid-year review of the 2023/2024 budget in Parliament on June 7.

Arjoon said, "The state relies heavily on taxes on income and profits, which generated $142 billion over six years, accounting for 68 per cent of total tax revenue. Tax evasion and avoidance are unacceptable, as they reduce fiscal revenues crucial for funding essential services like healthcare, education, and transport infrastructure.

"These revenue losses exacerbate fiscal deficits, increase debt and compound inequality. To compensate, the government might raise taxes, unfairly burdening compliant taxpayers and creating unfair competition in the private sector."

This situation, Arjoon continued, also allows tax-evading businesses to undercut compliant competitors, creating an uneven playing field.

"The state has a responsibility to ensure that taxpayers receive value for money when paying taxes through efficient public services and should improve tax collection to enhance service efficiency."

Arjoon said timely VAT (value added tax) refunds are crucial for compliant taxpayers.

"Therefore, fair, equitable and efficient tax collection, including paying outstanding taxes with penalties, is essential."

Referring to recent reports about certain businesses owing huge sums in unpaid taxes, Arjoon said the Board of Inland Revenue (BIR) is calling on them to pay.

"This action should have occurred years ago, raising questions about the delay.

But he added, "The BIR has a responsibility to ensure that tax information on individuals and entities remains confidential. While tax evasion and avoidance are intolerable, financial information on the private sector ought to be kept out of the public domain and any information leakage carries a huge risk of undermining the confidence and trust in the taxation system."

Arjoon said it is important for the authorities to go after people who are delinquent in paying taxes.

But at the same time, he continued, care must be exercised when it comes to disclosingp