Gail Alexan­der

Pay up!

Mo­torists im­me­di­ate­ly be­gan spend­ing more for diesel yes­ter­day.

Smok­ers, drinkers and on­line pur­chasers will al­so be do­ing like­wise–pay­ing more–from Oc­to­ber 20.

And a new "elite" tax for high in­come earn­ers and com­pa­nies will be im­ple­ment­ed from Jan­u­ary 2017, along with prop­er­ty tax for home­own­ers.

Fi­nance Min­is­ter Colm Im­bert an­nounced these and oth­er mea­sures in his 2017 Bud­get–a $53.4 bil­lion pack­age, $10 bil­lion less than his 2016 Bud­get–which he de­liv­ered in a three-hour ad­dress to Par­lia­ment yes­ter­day.

Among the high­lights was Im­bert's an­nounce­ment of a re­prieve on the con­tro­ver­sial US For­eign Ac­count Tax Com­pli­ance (FAT­CA ) is­sue.

He said the US Trea­sury had in­formed Gov­ern­ment that af­ter send­ing the US a de­tailed ex­pla­na­tion on its FAT­CA ef­forts, T&T is now "con­sid­ered "to have a tax ex­change agree­ment in ef­fect with the US."

"As such, T&T will not be sub­ject to any im­me­di­ate sanc­tions aris­ing from our in­abil­i­ty to meet the FAT­CA re­port­ing dead­line of Sep­tem­ber 30, 2016," Im­bert said, adding that full com­pli­ance is still need­ed. (See page 9)

Among rev­enue-rais­ing mea­sures for 2017, Im­bert con­tin­ued in­cre­men­tal re­moval of the fu­el sub­sidy–which be­gan in the 2016 Bud­get–in­creas­ing the price of diesel from $1.98 to $2.30 per litre. This be­came ef­fec­tive im­me­di­ate­ly and as Im­bert con­clud­ed speak­ing in Par­lia­ment, prices at some gas sta­tion pumps were changed.

From Oc­to­ber 20, ex­cise du­ty on lo­cal­ly man­u­fac­tured to­bac­co prod­ucts will rise by 15 per cent and on al­co­holic prod­ucts by 20 per cent, he said.

"Gov­ern­ment is of the view we need to curb con­sump­tion of al­co­hol and to­bac­co. It costs Gov­ern­ment $500,000 an­nu­al­ly to treat just one lung can­cer pa­tient," Im­bert ex­plained.

On the in­tro­duc­tion of the new high in­come earn­er tax, Im­bert said, "As we make ad­just­ments, it's im­per­a­tive we spread the bur­den of ad­just­ment across the so­ci­ety. The bur­den can­not fall on just one group alone. The time is thus op­por­tune to widen and deep­en the tax net with­in T&T."

The 30 per cent tax will ap­ply to high in­come earn­ers whose charge­able in­come ex­ceeds $1 mil­lion per year. It will al­so ap­ply to com­pa­nies with charge­able prof­its al­so in ex­cess of $1 mil­lion per year.

"This will be in­tro­duced on Jan­u­ary 1, 2017, and will en­sure that high­er in­come in­di­vid­u­als and cor­po­ra­tions make an ap­pro­pri­ate con­tri­bu­tion to the fis­cal ad­just­ment ef­fort," Im­bert added.

On the prop­er­ty tax which was to have been im­ple­ment­ed in 2016, Im­bert said le­gal ad­vice was re­ceived that it was un­con­sti­tu­tion­al to col­lect prop­er­ty tax­es us­ing the old rates, since dif­fer­ent rates ap­plied in dif­fer­ent ar­eas of T&T.

"As such, the ex­ist­ing Prop­er­ty Tax Act will now be put in­to ef­fect in 2017, with the pop­u­la­tion of the val­u­a­tion rolls, mi­nor amend­ments to the rel­e­vant law and oth­er mea­sures."

He said new tax in­voic­es will be is­sued in 2017 sub­se­quent to com­ple­tion of the val­u­a­tion roll pre­pared by the Com­mis­sion­er of Val­u­a­tions and the as­sess­ment rolls done by the In­land Rev­enue Di­vi­sion. Every prop­er­ty own­er is re­quired to sub­mit a re­turn, which will be used by the Val­u­a­tion Di­vi­sion to cal­cu­late the an­nu­al rental val­ue, "fail­ing which the di­vi­sion will pre­pare its own val­u­a­tion," he said.

Im­bert gave the as­sur­ance that the law has ex­emp­tions for home­own­ers on the ba­sis of their abil­i­ty to pay.

From Oc­to­ber 20 al­so, a sev­en per cent charge will be placed on on­line pur­chas­es that ar­rive in T&T through couri­er com­pa­nies, or that are brought in di­rect­ly by in­di­vid­u­als via air freight.

Im­bert said, "The pop­u­lar­i­ty of on­line pur­chas­es has in­creased sig­nif­i­cant­ly over the past few years. Re­duc­ing the de­mand for these items helps to save on for­eign ex­change and to as­sist lo­cal in­dus­try. There are 31 couri­er com­pa­nies reg­is­tered and bond­ed in T&T and it's es­ti­mat­ed the val­ue of pack­ages cleared by these com­pa­nies ex­ceeds $1 bil­lion an­nu­al­ly."

Among re­lief mea­sures he an­nounced for the least for­tu­nate was that per­sons whose month­ly elec­tric­i­ty bill is $300 or low­er will be ex­empt from the first $100 in elec­tric­i­ty charges. This be­gins De­cem­ber 1, 2016.

The high­est bud­getary al­lo­ca­tion again went to Na­tion­al Se­cu­ri­ty ($7.7 bil­lion), al­though it was 29 per cent less than its al­lo­ca­tion last year. Next was Ed­u­ca­tion ($7.3 bil­lion), Health ($6.3 bil­lion), Pub­lic Util­i­ties ($3.3 bil­lion), Works & Trans­port ($2 bil­lion), Rur­al De­vel­op­ment/Lo­cal Gov­ern­ment ($1.9 bil­lion), Agri­cul­ture ($766 mil­lion) and Hous­ing ($664 mil­lion).

The To­ba­go House of As­sem­bly re­ceived $2.354 bil­lion.

Yes­ter­day's bud­get theme was "Shap­ing A Brighter Fu­ture–A Blue­print for Trans­for­ma­tion and Growth."

Im­bert said the Bud­get con­tin­ues the fis­cal con­sol­i­da­tion process geared to bring ex­pen­di­ture in­to bet­ter align­ment with avail­able rev­enues.

The 2017 deficit is pro­ject­ed at $6 bil­lion and Im­bert's 2017 pack­age is less than the 2016 Bud­get of $63 bil­lion, which car­ried a deficit of $7.3 bil­lion.

The Bud­get was based on an oil price of US$48 and gas price of US$2.25 per mmb­tu.

The 2016 Bud­get was based on a US$45 price.

Gov­ern­ment es­ti­mates 2017 rev­enue at $47.4 bil­lion–$2.5 bil­lion high­er than for 2016. The 2017 fig­ure in­cludes es­ti­mat­ed yield from the new tax mea­sures.

Oth­er rev­enue rais­ing mea­sures in­clude sale of shares in First Cit­i­zens, TTNGL, Eteck and Trinidad Gen­er­a­tion Un­lim­it­ed, plus a pro­posed part­ner­ship for Lake As­phalt.

De­bate con­tin­ues at 1.30 pm next Thurs­day with Op­po­si­tion Leader Kam­la Per­sad-Bisses­sar's re­ply.

OTH­ER BUD­GET HIGH­LIGHTS

n Na­tion­al tal­ent search to en­cour­age in­no­v­a­tive busi­ness ideas to be eval­u­at­ed by a pan­el of ac­com­plished busi­ness­men. Top five projects re­ceive a $1 mil­lion grant.

n VAT ex­emp­tion for for­eign yacht re­pair ser­vices from 2017 first quar­ter.

n Gov­ern­ment re­cov­ers $620 mil­lion from OAS on Point Fortin high­way project; ten­ders for com­ple­tion to be is­sued soon.

n Gov­ern­ment sav­ings bonds linked to pur­chase of hous­ing and ed­u­ca­tion.

n To­ba­go San­dals to in­ject in­to T&T's econ­o­my over $500 mil­lion a year, cre­at­ing 2,000 con­struc­tion jobs over the two and a half-year con­struc­tion pe­ri­od and 2,000 more jobs in the re­sort.

n Rev­enue Au­thor­i­ty ex­pect­ed to earn first-year rev­enue of $100 mil­lion.

n NA­PA now fit for oc­cu­pa­tion, work to start soon on Pres­i­dent's House, oth­er her­itage build­ings

n Cou­va Chil­dren's Hos­pi­tal to be­come Cou­va Hos­pi­tal and Train­ing Fa­cil­i­ty.

n Gam­ing reg­u­la­tion for T&T, the on­ly coun­try world­wide with an open­ly thriv­ing, un­reg­u­lat­ed gam­bling sec­tor.

n Ra­tio­nal­i­sa­tion of over­lap­ping so­cial pro­grammes, re­struc­tur­ing of Cepep, URP.

FAT­CA re­prieve comes

Fi­nance Min­is­ter Colm Im­bert al­so ex­plained yes­ter­day that T&T had re­ceived a re­prieve on the FAT­CA leg­is­la­tion.

"In re­cent weeks, there's been con­sid­er­able anx­i­ety in the pop­u­la­tion over the un­will­ing­ness of the Op­po­si­tion to sup­port the Tax In­for­ma­tion and Ex­change Agree­ment Bill 2016, de­signed to make us FAT­CA com­pli­ant and to en­sure lo­cal banks and in­sur­ance com­pa­nies will not be sub­ject to a 30 per cent with­hold­ing tax on US flow­ing from the Unit­ed States in­to the lo­cal bank­ing sys­tem, or vice ver­sa, among oth­er se­ri­ous ad­verse con­se­quences, such as the loss of cor­re­spon­dent bank­ing.

"This anx­i­ety flows from a dead­line for com­pli­ance which ex­pires to­day. I'm now in a po­si­tion to al­lay cit­i­zens' fears re­gard­ing T&T's in­abil­i­ty to meet the FAT­CA re­port­ing dead­line of to­day, Sep­tem­ber 30, 2016."

He said on as­sum­ing of­fice in Sep­tem­ber 2015, they dis­cov­ered a pre­vi­ous FAT­CA re­port­ing dead­line of Sep­tem­ber 30, 2015, was im­mi­nent, and had to scram­ble to quick­ly ob­tain an ex­ten­sion of time to avoid black­list­ing of T&T.

"We sub­se­quent­ly care­ful­ly re­viewed our oblig­a­tions un­der FAT­CA, con­firmed the re­quired pol­i­cy, signed the in­ter-gov­ern­men­tal tax in­for­ma­tion agree­ment with the USA and in­tro­duced the nec­es­sary gov­ern­ing leg­is­la­tion in ear­ly Sep­tem­ber 2016 to achieve com­pli­ance," he said.

He said af­ter it be­came ap­par­ent the Op­po­si­tion wouldn't sup­port the tax bill, he com­mu­ni­cat­ed with the US Trea­sury to ex­plain the sit­u­a­tion.

He added, "We gave the US Trea­sury a de­tailed step-by-step plan with re­spect to meet­ing our oblig­a­tions un­der FAT­CA...I'm pleased to re­port the US Trea­sury has in­formed us that be­cause we've signed the In­ter-Gov­ern­men­tal Agree­ment, demon­strat­ed firm re­solve to achieve com­pli­ance by seek­ing to en­act the nec­es­sary gov­ern­ing leg­is­la­tion and we've sub­mit­ted a de­tailed plan of ac­tion to achieve com­pli­ance with FAT­CA, we're con­sid­ered, as of now, to have a tax in­for­ma­tion ex­change agree­ment 'in ef­fect' with the USA. As such, T&T will not be sub­ject to any im­me­di­ate sanc­tions aris­ing from our in­abil­i­ty to meet the FAT­CA re­port­ing dead­line of Sep­tem­ber 30, 2016."

How­ev­er, he said the US Trea­sury will be mon­i­tor­ing T&T's progress in­to 2017 and if it does not achieve full com­pli­ance by the next re­port­ing dead­line, T&T will be re­moved from the list of coun­tries that have an In­ter-Gov­ern­men­tal Agree­ment in ef­fect and sub­ject­ed to the full brunt of the sanc­tions from FAT­CA non-com­pli­ance.