ROSE­MARIE SANT

Ex­pect to be pay­ing more for to­bac­co and al­co­hol prod­ucts from Sep­tem­ber 30 when the 2016-2017 bud­get is pre­sent­ed.

The Fi­nance Min­istry says the line min­is­ter, Colm Im­bert, will read the bud­get at 1.30 pm in Par­lia­ment and it's go­ing to be an aus­ter­i­ty bud­get in light of the coun­try's de­clin­ing rev­enues from the en­er­gy sec­tor which Prime Min­is­ter Dr Kei­th Row­ley said have fall­en by as much as 70 per cent.The bud­get has to be in place by the end of Oc­to­ber for start of the new fi­nan­cial year. Im­bert gave the date in an an­nounce­ment in Par­lia­ment yes­ter­day.

Row­ley has al­ready hint­ed of a small­er bud­get than last year's $63 bil­lion bud­get, be­low $60 bil­lion, but one in­clud­ing more tax­es.There has been spec­u­la­tion by some that the 2017 pack­age will be a "tough" bud­get on cit­i­zen's pock­ets fol­low­ing some Gov­ern­ment hints of rev­enue chal­lenges.

The last bud­get had in­clud­ed cost-in­crease items, in­clud­ing ex­pan­sion of VAT on items and a fu­el hike. An­oth­er fu­el hike came in the mid-year re­view in April.

In his ad­dress to the na­tion last Sun­day, Row­ley told the coun­try that de­spite the falling rev­enues ad­just­ments have been min­i­mal. Gov­ern­ment has boast­ed that there have been no ma­jor re­trench­ments and it had cut back on its own ex­pen­di­ture with less for­eign trav­el and ex­pen­di­ture in min­istries had been re­duced across the board by sev­en per cent.

And for the first time it was set up the Gov­ern­ment dipped in­to the her­itage and Sta­bil­i­sa­tion Fund. tak­ing US$375 mil­lion out of the fund to as­sist with the run­ning of the econ­o­my, in­clud­ing pay­ment of salaries.

Im­bert is al­so ex­pect­ed to give de­tails on the tax amnesty which ends to­mor­row and how much rev­enue Gov­ern­ment was able to raise from the amnesty. He had es­ti­mat­ed $500 mil­lion but our sources tell us that it could be sig­nif­i­cant­ly less.

Changes to the Val­ue Added Tax sys­tem which saw a drop from 15 per cent to 12.5 per cent and the in­crease in VAT reg­is­tra­tion from $360,000 to $500,000 will al­so be ad­dressed. The min­is­ter had hoped to in­crease rev­enue col­lec­tions through this mea­sure to $12.4 bil­lion up from the 2015 es­ti­mates of $6.7 bil­lion.

What to ex­pect

Among the mea­sures ex­pect­ed in the 2016-2017 fis­cal pack­age are the on­line shop­ping tax which the min­is­ter had first hint­ed at in the 2016 bud­get.

Mech­a­nisms for im­ple­men­ta­tion of the prop­er­ty tax have been worked out, sources said, and this mea­sure, which was an­nounced in the pre­vi­ous bud­get, would be im­ple­ment­ed from Jan­u­ary 1, 2017.

In­creas­es in tax­es on casi­nos and gam­ing ma­chines are al­so ex­pect­ed to take ef­fect in the bud­get and con­sumers of al­co­hol and to­bac­co can al­so ex­pect to pay more for what have been de­scribed as "lux­u­ry items."

Well-placed sources told the T&T Guardian that there would be a fur­ther re­duc­tion in the fu­el sub­sidy. In the last bud­get the price of su­per gaso­line went to $3.11 up from the pre­vi­ous $2.70 and there was al­so an in­crease in the price of diesel from $1.50 to $1.72 a litre.

Con­cerned about the de­cline in oil pro­duc­tion sources tell us that Gov­ern­ment would be seek­ing to en­cour­age up­stream pro­duc­tion. Steps will al­so be an­nounced as Gov­ern­ment moves to en­sure that it meets an an­nounced com­mit­ment for ten per cent of en­er­gy to be from re­new­able sources by 2021.

Our sources say there is like­ly to be a re­view of en­er­gy tax in­cen­tive mea­sures and a re­duc­tion in cor­po­ra­tion tax­es. There will be no changes to per­son­al in­come tax­es.

In­creas­es in al­lo­ca­tions to the Min­istries of Na­tion­al Se­cu­ri­ty and Health are on the cards since these have been deemed as the two most crit­i­cal ar­eas at this time, sources said.

The bud­get, ac­cord­ing to our sources, will be pred­i­cat­ed on an oil price of US$40 or US$45 a bar­rel and Gov­ern­ment is ex­pect­ed to tell the coun­try that it had sig­nif­i­cant­ly re­duced the bud­get deficit.

Mea­sures will al­so be de­tailed to ad­dress the wors­en­ing for­eign ex­change sit­u­a­tion, sources said.