T&T 30% Millionaire Tax

[DVSTT]

Most millionaires who own their own company don't even pay the current 25% tax on their income.
Most of their personal expenses are funneled thru the company's books, so they can pay themselves what appears to be a low salary for tax purposes, plus their company records a lower profit and hence pays less tax.

Friend of mine has a smallish construction business. Few years ago she had a really good year.

Accountant called her near year end to warn the tax was going to be high.

When she saw the est tax bill she was shocked. She asked if there was anything she could do to mitigate the tax bill.

Accountant say she must acquire company assets.

So said. So done.

Tax bill reduced.

That was the accountants solution? She bought a SUV/"company assets"?
Carry on....

No she acquired a company car that she uses for company business that she charges off against company revenue reducing company taxable expense.

Read b/t the lines.

It really works like that ?

[Dave]

There is a difference between tax avoidance and tax evasion. The later being illegal. I was recently included in a meeting at the BIR and they literally said they are overwhelmed.

[Duane 3NE 2NR]

There is a difference between tax avoidance and tax evasion. The later being illegal. I was recently included in a meeting at the BIR and they literally said they are overwhelmed.

overwhelmed with tax avoidance? tax evasion? tax returns? what are the overwhelmed with?

[S_2NR]

if they are overwhelmed doing their job, maybe they should find a new one (or push for changes that would ease them up)

[Dave]

Lol all of the above. Seriously. However they have spent a lot of money in pieces of software for a database to be able link their field audit so they can link suppliers with customers and be in more comfortable position to target who are the offenders.

[Miktay]

It really works like that ?

Am oversimplifying it a bit. But yeah.

Smart people know small business iza lifestyle. If u fund lifestyle thru business u reduce taxable income. It's called tax mitigation. But u have to be reasonable. And u have to keep records.

The BIR can never effectively police all the small businesses in sweet T&T. Even if they had the resources it would be impossible.

That's the fallacy of Big Gubbament taxation schemes. Soaking the rich never works. Not in sweet T&T. Not in the developed world.

It falls on the middle class to pay for State revenue shortfalls.

[pugboy]

it is kinda hard to tell a privately owned company how to spend their money

[EL JEFE]

Lol all of the above. Seriously. However they have spent a lot of money in pieces of software for a database to be able link their field audit so they can link suppliers with customers and be in more comfortable position to target who are the offenders.

If there was a way that the BIR could check the financials that businesses submit to the bank, they would catch a lot of people. Too many unscrupulous accountants out here preparing two sets of financials. One for the bank and one for BIR.

[Redman]

I've been told that they are beefing up BIR ....and the Law enforcement arms are also training up.....

I hope that if/ when enforcement starts they penalize the auditors,accountants,bankers and BIR employees that have been complicit

[A172]

delusional crew ITT

[Dizzy28]

it is kinda hard to tell a privately owned company how to spend their money

Thats just it though..its not always their money. Sometimes it the country's money via legally due taxes that they spending.

[pugboy]

No

it is kinda hard to tell a privately owned company how to spend their money

Thats just it though..its not always their money. Sometimes it the country's money via legally due taxes that they spending.

[Dizzy28]

No

it is kinda hard to tell a privately owned company how to spend their money

Thats just it though..its not always their money. Sometimes it the country's money via legally due taxes that they spending.

So the 25% tax salaried individuals pay on the income they earn above $72,000 is theirs or the Government's?

[eliteauto]

Salaried employees is not the same as business owners. As stated above many business owners pay themselves below the threshold and have living expenses passed through the company. It's not illegal

[Miktay]

BIR has a systemic problem inherent in all Big Gubbament institutions.

It goes something like this.

Say BIR hires the brightest most educated ambitious matriculates from top law and accounting programmes. Assume these people work hard...are honest...and continually upgrade their knowledge. As they rise thru the ranks they become more valuable to BIR because of knowledge and experience.

Then guess what happens?

The cream of the crop are hired away by private accounting firms with more generous offers of perks & salaries.

What do these private accounting firms do? A number of things but among them they advise public and private business how to legally minimize taxes via tax planning.

How do u think that BIR will cope with this...given their limited resources?

Not well...am afraid. Thiz iz yet another wrinkle in the execution of Big Gubbament mandated taxation schemes

[Redman]

Salaried employees is not the same as business owners. As stated above many business owners pay themselves below the threshold and have living expenses passed through the company. It's not illegal

Yes it is.

The Owner is receiving a benefit-ie compensation that he is not accounting for.

The business is expensing out items that are not directly correlated to the business....

the nexus point is where the numbers are fudged.

it works cuz nobody checks to see if the accountants are practicing their profession as they are mandated to by the code of ethics.

[Miktay]

it is kinda hard to tell a privately owned company how to spend their money

Thats just it though..its not always their money. Sometimes it the country's money via legally due taxes that they spending.

Define 'legally due taxes'

[Dizzy28]

Salaried employees is not the same as business owners. As stated above many business owners pay themselves below the threshold and have living expenses passed through the company. It's not illegal

Yes it is illegal if you account for it solely as a company expense. This is where Benefits In Kind come in -

Income Tax Act 134
Subject to sections 135 to 141, where a company incurs expense in or in connection with the provision, for any of its directors or for any person employed by it in an employment to which sections 133 to 141* apply, of living or other accommodation, of entertainment, of domestic or other services or of other benefits or facilities of whatsoever nature, and, apart from this section the expense would not be chargeable to tax as income of the director or employee, so much of the said expenses as is not made good to the company by the director or employee shall be chargeable to tax under the provisions of this Act as if the expense had been incurred by the director or employee and the amount thereof had been refunded to him by the company by means of a payment in respect of expenses, and section 76 and subsection (2) of this section shall have effect in relation thereto.

[88sins]

Nobody is going to be paying this proposed 30% tiered tax. Persons will simply have increased expenses, have higher BIR approved annuities, & use other means of receiving payment that are not as easily traceable, all in efforts to avoid it.
truth be told, it real easy to duck taxes in T&T, regardless of if its PAYE, Corp. tax, Bus. Levy, or G/F levy. Only tax that isn't so easy to avoid is W/H tax, & that's only because it's not only BIR involved in that. And even that has a few loopholes.

so people, have no fear. the millionaires it's intended for can & will avoid it , meanwhile the middle class working people will be made to pay to compensate for what they couldn't find to collect.

[pugboy]

So what does bit say about judges and magistrates who prob make an equivalent amount of money as their salary as "housing allowance" along with a good few other "allowances"

[De Dragon]

So what does bit say about judges and magistrates who prob make an equivalent amount of money as their salary as "housing allowance" along with a good few other "allowances"

Judges salaries are tax free.

[pugboy]

Some animals are more equal than others

[De Dragon]

Some animals are more equal than others

Their allowances are also tax free.

[pugboy]

well then why bother break down their "salary" into a list of "allowances"
just say taxpayers giving you X amount taxfree and not beat around the bush

[Dizzy28]

well then why bother break down their "salary" into a list of "allowances"
just say taxpayers giving you X amount taxfree and not beat around the bush

Pensions would be based on the before allowances salary. Thus the need to have separation.

[pugboy]

only when you get older you realise the benfits of some govt jobs if you willing to stick it out a lifetime

i have a padna doing basic clerical work in central bank, he is over 50 now and with the kind of
benefits he have and pension he can't afford to leave at all

[dude2014]

if they are overwhelmed doing their job, maybe they should find a new one (or push for changes that would ease them up)

Thousand of persons receiving emoluments/remuneration who were required to file tax return when the Personnl allowance was $25k does not have to due to it being pushed to $60k then $72k.

How are the folks at BIR are overwhelmed?
Other than they probably breathing the foul smell from the toilets at Trinidad House which are really glorified latrines. Didnt Duke shut the place down because of this?

Complain all you want about those persons who are acquiring assets to reduce their tax burden and dont learn of a few ways to un-burden yourself from yourself.

That is one SUV that is engaged ...........

[bluesclues]

only when you get older you realise the benfits of some govt jobs if you willing to stick it out a lifetime

i have a padna doing basic clerical work in central bank, he is over 50 now and with the kind of
benefits he have and pension he can't afford to leave at all

I just cant deal with being trapped in one situation my whole life. I need to be self employed, stay home when i want.. sleep late when i want. Expanding and doing multiple things for money. My life philosophy just doesnt allow for me to hold one job for 40 yrs no way! that feels like jail the more i think about it. Hoping to enter a new tax bracket for 2017 but i dont see why someone making $100,000 a month would need to duck taxes. 70,000 is not enough for one human being???? Hommuch money yuh want so? Hommuch yuh need so??? What is yuh goal? To become fu man chu? 700,000 a year and the pride of having contributed 300,000 to society in taxes singlehandedly should be reward enough. wah you want so? A 30million dollar house? I doh know nah. But it does boil down to what ppl living this life for and what is their philosophy. I personally happy with just having no financial worries.

[eliteauto]

only when you get older you realise the benfits of some govt jobs if you willing to stick it out a lifetime

i have a padna doing basic clerical work in central bank, he is over 50 now and with the kind of
benefits he have and pension he can't afford to leave at all

I just cant deal with being trapped in one situation my whole life. I need to be self employed, stay home when i want.. sleep late when i want. Expanding and doing multiple things for money. My life philosophy just doesnt allow for me to hold one job for 40 yrs no way! that feels like jail the more i think about it. Hoping to enter a new tax bracket for 2017 but i dont see why someone making $100,000 a month would need to duck taxes. 70,000 is not enough for one human being???? Hommuch money yuh want so? Hommuch yuh need so??? What is yuh goal? To become fu man chu? 700,000 a year and the pride of having contributed 300,000 to society in taxes singlehandedly should be reward enough. wah you want so? A 30million dollar house? I doh know nah. But it does boil down to what ppl living this life for and what is their philosophy. I personally happy with just having no financial worries.

Whilst self-employment does offer a sense of freedom, successful self-employed people work harder than salaried people, they put in more (and odder) hours daily to become successful. Driven ppl who choose to operate in their chosen sphere know what it takes to earn the lifestyle they enjoy that's what drives them to be more guarded with their earnings, simply put they know the value of money and what it offers, so don't assume greed is the motive to "duck" taxes. Also I dunno how much "pride" one can feel in contributing taxes to a broken system which doesn't necessarily reinvest those taxes to address societal ills, hence many successful ppl directly contribute through charities, social clubs, sponsorship etc. Maybe when you enter your new bracket you will understand. The system is there for everyone some are upset they just don't know how to use it.

[ruffneck_12]

good ting I poor

damn it feels good to be a suffra