Richard?Lord

Cit­i­zens are now pay­ing more to trav­el af­ter a 15 per cent in­crease in the price per litre of su­per gaso­line and diesel went in­to im­me­di­ate ef­fect yes­ter­day. Al­co­hol and cig­a­rettes are al­so go­ing up, a 50 per cent tax will be levied on lux­u­ry ve­hi­cles with an en­gine size ex­ceed­ing 1999cc, and In­ter­net shop­pers will face a sev­en per cent tax by Sep­tem­ber.

These were some of the key mea­sures Fi­nance Min­is­ter Colm Im­bert pre­sent­ed in the gov­ern­ment's first Fi­nance Vari­a­tion of Ap­pro­pri­a­tion Bill 2016 in the House of Rep­re­sen­ta­tives, yes­ter­day.

Im­bert said the Gov­ern­ment, in the fu­ture, in­tends to "in­tro­duce a new regime for fu­el so that the price will go up and down based on the in­ter­na­tion­al prices of oil and pe­tro­le­um prod­ucts.

"Like (for­mer busi­ness­man) Max Sen­house used to say, 'we need the mon­ey,'" Im­bert told leg­is­la­tors in his 88-minute pre­sen­ta­tion, adding that cit­i­zens can­not have "cham­pagne taste with mau­by pock­ets."

"The price of su­per gaso­line would be in­creased by 15 per cent to (re­tail at) $3.50 per litre. The price of diesel will be sim­i­lar­ly in­creased by 15 per cent to $2.00 per litre," he said of the fu­el hike.

Ac­cord­ing to Im­bert, "su­per gaso­line will no longer be sub­sidised at the cur­rent oil price," while diesel will re­main sub­sided "at this time by ap­prox­i­mate­ly $1 per litre." Pre­mi­um gaso­line is al­ready not be­ing sub­sidised, he not­ed.

He said the fu­el sub­sidy had cost the coun­try $31 bil­lion in the past ten years, adding that stud­ies show the sub­si­dies "dis­pro­por­tion­ate­ly ben­e­fit the rich rather than the poor."

Im­bert said the fu­el sub­sidy was con­tribut­ing to "traf­fic con­ges­tion, pol­lu­tion, dam­age to roads, en­vi­ron­men­tal dam­age and rev­enue leak­age," adding that even af­ter the ad­just­ment in do­mes­tic fu­el prices in No­vem­ber 2015, "the cur­rent cost of the fu­el sub­sidy, in­clud­ing ar­rears, re­mains at close to $600 mil­lion at cur­rent oil prices."

Im­bert said to cush­ion the ef­fects of the price in­crease in diesel, there will be a re­duc­tion in tax­es on maxi taxis and taxis. He told leg­is­la­tors the mea­sure was in­tend­ed to re­duce the cost of pub­lic trans­port ve­hi­cles, and the tax re­duc­tions are to be im­ple­ment­ed next month af­ter the Fi­nance Bill 2 is ap­proved in Par­lia­ment. That bill is to be de­bat­ed in Par­lia­ment next month.

On the oth­er hand, Im­bert said Gov­ern­ment will re­move all tax­es on CNG, elec­tric and hy­brid cars with en­gine sizes up to 1999cc and will be­gin the process for con­ver­sion of all gov­ern­ment ve­hi­cles, fast fer­ries and wa­ter taxis to CNG and or al­ter­na­tive pow­er sources.

He said the mass tran­sit sys­tem that was promised by the Peo­ple's Na­tion­al Move­ment dur­ing last Sep­tem­ber's elec­tion cam­paign was de­ter­mined to be "ex­pen­sive and not fea­si­ble at this time" by the In­ter­na­tion­al De­vel­op­ment Bank.

"We sim­ply can­not af­ford to pro­ceed with this project at this time," he added.

The mea­sure was in­tend­ed to be the so­lu­tion to the coun­try's traf­fic woes.

Im­bert was al­so un­able to say ex­act­ly when and how pub­lic of­fi­cers will be paid the sec­ond half of their back­pay and ar­rears, which were award­ed be­fore the Sep­tem­ber 2015 gen­er­al elec­tions un­der the then PP gov­ern­ment.

He said the Gov­ern­ment in­tends to pay 50 per cent of the out­stand­ing ar­rears of salaries to pub­lic of­fi­cers by the end of June 2016, and hopes to pay the re­main­ing 50 per cent in ei­ther in­ter­est-bear­ing gov­ern­ment bonds by the end of Sep­tem­ber 2016, or in fur­ther in­stal­ments in cash in 2017, at the op­tion of the work­ers.

Ad­dress­ing the for­eign ex­change is­sue, Im­bert said the dra­mat­ic fall in the coun­try's en­er­gy re­ceipts had cre­at­ed a se­vere im­bal­ance in the sup­ply and de­mand for for­eign ex­change. He added, how­ev­er, that the coun­try's for­eign re­serves have re­mained sta­ble.

He said the for­eign ex­change is­sue was af­fect­ed by oth­er fac­tors, in­clud­ing the sharp in­crease in bank cred­it, par­tic­u­lar­ly for au­to­mo­biles and un­doubt­ed­ly some cap­i­tal flight, which added to the pres­sures in the for­eign ex­change mar­ket.

He said the Cen­tral Bank had al­lowed the ex­change rate to ad­just, but the coun­try still has 11 months of im­port cov­er.

"We do not in­tend to al­low our cur­ren­cy to be­come un­sta­ble and the Gov­ern­ment will in­ter­vene as and when nec­es­sary to de­fend and sta­bilise our ex­change rate," he in­sist­ed.

Ac­cord­ing to the min­is­ter, "Ap­pro­pri­ate mea­sures will be tak­en to en­sure that our ex­change rate does not move by more than a fur­ther 3.3 per cent from to­day's rate."

Im­bert said the coun­try must put its fi­nan­cial house in or­der by 2018 when the gap be­tween cur­rent rev­enue and to­tal ex­pen­di­ture, in­clud­ing cap­i­tal ex­pen­di­ture, must not ex­ceed $10 bil­lion.

The de­bate was not with­out con­tro­ver­sy, as the Op­po­si­tion tried un­suc­cess­ful­ly to have the de­bate de­layed on the grounds that it did not have the re­quired time to pre­pare its re­sponse.

But House Speak­er Bridgid Anisette-George got the ma­jor­i­ty vote re­quired to have the mat­ter pro­ceed. Op­po­si­tion Leader Kam­la Per­sad-Bisses­sar, who was the first to re­spond, was giv­en 88 min­utes like Im­bert.

More in­fo

?Oth­er mea­sures to be in­tro­duced in­clude the fol­low­ing:

�2 A levy of sev­en per cent to be im­posed on pur­chas­es of goods and ser­vices through the In­ter­net from re­tail com­pa­nies res­i­dent over­seas, that are not sub­ject to tax­a­tion in T&T.

He said that move will af­fect com­pa­nies such as Dell, Wal­mart, Sta­ples and Ama­zon.

"This tax is in­tend­ed to help man­age the in­crease in for­eign out­flows from on­line pur­chas­es, re­duce rev­enue leak­age and as­sist lo­cal man­u­fac­tur­ers and ser­vice com­pa­nies to com­pete with over­seas re­tail­ers." It will take ef­fect from Sep­tem­ber.

�2 In­crease of 50 per cent cus­toms du­ty and mo­tor ve­hi­cle tax on lux­u­ry ve­hi­cles, start­ing with pri­vate mo­tor ve­hi­cles with en­gine size ex­ceed­ing 1999cc, which will take ef­fect im­me­di­ate­ly.

�2 Bet­ter col­lec­tion of tax­es from the gam­ing and gam­bling in­dus­try

�2 In­creased tax­es on al­co­hol and to­bac­co prod­ucts, to take ef­fect next month.