PE­TER CHRISTO­PHER

Se­nior Mul­ti­me­dia Re­porter

pe­ter.christo­pher@guardian.co.tt

Leg­is­la­tion geared to­wards in­creas­ing the amount of US dol­lars paid to the Gov­ern­ment by en­er­gy sec­tor com­pa­nies is set to come in­to ef­fect by ear­ly 2025.

This was an­nounced by Fi­nance Min­is­ter Colm Im­bert dur­ing a pan­el dis­cus­sion at the Trinidad and To­ba­go Man­u­fac­tur­ers As­so­ci­a­tion’s (TTMA) Post Bud­get Dis­cus­sion at the Hy­att Re­gency in Port-of-Spain yes­ter­day.

The Fi­nance Min­is­ter ex­plained that the coun­try was cur­rent­ly miss­ing out on ap­prox­i­mate­ly US$2 bil­lion an­nu­al­ly from en­er­gy sec­tor com­pa­nies. Dur­ing the bud­get, the Fi­nance Min­is­ter said by 2025 he would in­tro­duce leg­is­la­tion to en­cour­age en­er­gy sec­tor com­pa­nies to pay all their tax­es in US dol­lars, giv­en all of their prod­ucts are ex­port­ed.

“I made a state­ment in the bud­get, and I want to ex­plain why I did it. We earn about $28 bil­lion in a good year from the en­er­gy sec­tor in T&T. We are sup­posed to get about $28 bil­lion in terms of en­er­gy tax­a­tion. Now, if you do the math, that’s about four bil­lion US dol­lars more or less: $26, 27, 28 bil­lion TT is four bil­lion US, but the amount that we ac­tu­al­ly re­ceive is on­ly $2 bil­lion. So there’s a miss­ing two bil­lion some­where,” said Im­bert.

“So what the en­er­gy com­pa­nies are do­ing is they’re con­vert­ing US out­side of the gov­ern­ment sys­tem. That doesn’t make any sense, be­cause if you’re a pro­duc­er of oil or a pro­duc­er of petro­chem­i­cals, all your prod­ucts are ex­port­ed, and all of them are go­ing to gen­er­ate for­eign ex­change in terms of rev­enue for the com­pa­ny.

“So I said to my­self, rather than try and fig­ure out what’s go­ing on here, why is it we’re on­ly get­ting two bil­lion out of the four bil­lion re­port­ed be­fore? Are we go­ing to en­cour­age them to pay more on their tax­es in the US?”

Im­bert said that leg­is­la­tion should add US$2 bil­lion to the lo­cal econ­o­my; how­ev­er, he ex­plained there would still be a need for a fur­ther in­jec­tion of for­eign ex­change even when this leg­is­la­tion comes in­to ef­fect.

“The in­jec­tion is still re­quired, but we could send more mon­ey through the Ex­im Bank be­cause that is a struc­ture-fo­cused sys­tem that’s work­ing so that the for­eign ex­change will then go to the pro­duc­tive sec­tor,” said Im­bert.

Econ­o­mist Dr Mar­lene Attzs im­me­di­ate­ly asked him when the leg­is­la­tion would like­ly come in­to ef­fect, to which he said, “Three to four months. Peo­ple are work­ing on it al­ready.” For­mer fi­nance min­is­ter Karen Nunez-Tesheira said she sup­ports the move giv­en the sig­nif­i­cant chal­lenges to ac­cess­ing for­eign ex­change lo­cal­ly.

“A lot of the in­ter­na­tion­al en­er­gy com­pa­nies did; they bought up a lot of the VAT bonds, and then in­stead of hav­ing to change a lot of the US dol­lars to pay their lo­cal debts, they sold their bonds to the banks, and there­fore we’re able to save the US cur­ren­cy and use the lo­cal cur­ren­cy to do that. So I guess that’s one of the things he wants to ad­dress; I sup­port it. We need for­eign ex­change,” said Nunez-Tesheira in an in­ter­view with Guardian Me­dia im­me­di­ate­ly af­ter the pre­sen­ta­tion.

The avail­abil­i­ty of for­eign ex­change has been a re­cur­ring is­sue with busi­ness own­ers as well as the wider pub­lic rais­ing con­cerns about the lim­it­ed avail­abil­i­ty of for­eign cur­ren­cy.

Over the past two years, sev­er­al com­mer­cial banks have ad­just­ed their US spend­ing lim­its down­ward on cred­it and deb­it cards amid the lim­it­ed sup­ply of for­eign ex­change.