Put your taxes in order via Government’s upcoming three-month tax amnesty, because future amnesties are unlikely.
This was Finance Minister Colm Imbert’s warning in his mid-year review yesterday as he announced the amnesty on all forms of taxation.
The measure was the only one announced in Imbert’s “good news” review, where he painted a glowing picture of the economy, gave assurances on recent concerns about BPTT’s gas supplies for Atlantic LNG’s Train One - and hit critics and commentators.
“... Notwithstanding this campaign of negativity, data available from our Central Bank, Central Statistical Office, the Finance Ministry and Energy Ministry and in the public domain, confirms the indisputable fact that we’ve recovered from the oil shock of 2014 to 2016 and we’ve stabilised our economy,” Imbert said during his 44-minute address to Parliament.
Imbert didn’t impose any taxes or raise the fuel price, which he did in the last Budget and previous ones. He, however, increased the 2019 Budget from its initial $51.7 billion level to $52.07 billion.
On the amnesty, Imbert said, “We’ve established a foundation on which we can now adopt expansionary initiatives and this success hasn’t occurred by chance. Accordingly, at this time we see no need whatsoever to impose any additional burdens on our citizens.”
In that context and to allow the soon-to-be-established T&T Revenue Authority to start with a clean slate, he added, “There will be a three-month tax amnesty, starting mid-June and extending to mid-September 2019, to all forms of taxation. Appropriate legislation to give effect to this measure will be introduced in (Parliament) within the next few weeks.
“Taxpayers are urged to take advantage of this amnesty, file their outstanding returns and pay their back taxes, because once the new Revenue Authority comes on stream, future amnesties are unlikely.”
Parliamentary committee reports on legislation to facilitate the long-planned TTRA (and to regulate the gaming sector) were laid in Parliament yesterday, bringing the TTRA and gaming sector regulation a step closer.
Imbert also sought to allay concerns which arose after BPTT announced it may not be able to guarantee a continued gas supply for Atlantic LNG’s Train One plant. Prior to his delivery, the Opposition had asked Imbert to explain the possible impact of the situation on T&T’s economic recovery. Imbert had told the Opposition then he would reply to this in the review.
Citing “alarmist” articles about the gas concerns, he added, “The unwarranted negativity that’s evident in these publications follows a pattern that’s endemic in some quarters.”
Imbert said Government is ensuring that natural gas production will continue to be a major driver of economic growth.
“Largely because of the efforts of our energy sector negotiating teams, natural gas production increased in 2018 to an average of 3.63 billion standard cubic feet per day, an 8 per cent increase over the 2017 average of 3.36 bcf per day. Further, gas production continues to increase and is expected to reach an average of 3.8 bcf per day in 2019. Indeed, production is already averaging 3.81 bcf per day in the first quarter of 2019.”
He added, “Allow me to clarify (the BPTT issue). The BP wells with less than satisfactory results are only two in number and are infill wells in existing gas fields. Unlike exploration wells, infill wells are normally brought into production almost immediately. I’m advised that one of these infill wells will go into production shortly, although with lower volumes than anticipated, leaving just one unproductive well. All this drama over one unproductive well is totally unnecessary!
“However, in February 2019, just three months ago, gas production almost reached 4.0 bcf per day, the highest production since March 2015. Accordingly, notwithstanding recent events, the Energy Ministry, after consultation with the major oil and gas companies, has advised that gas production is still expected to average 3.8 bcf per day in 2018.”
Imbert added, “When BHP Billiton announced the discovery of a significant gas find in 2018, and another encouraging gas find in April 2019, and the company made it clear that it intended to make a huge financial investment in T&T, we didn’t hear one peep out of the naysayers. Clearly, they’re allergic to good news.
“Further, oil production is projected to stabilise in 2019 and thereafter trend steadily upwards from the current 60,000 barrels per day in 2019 to over 80,000 barrels per day by 2023. This projected expansion is partly due to the performance of the newly-established oil production company, Heritage Petroleum, which has begun to ramp up its exploration and production activities, as well as the planned activities of other local oil producers.
“We also envisage that barring unforeseen circumstances, the resumption of refining operations at Point-a-Pierre could take place by December 2019, since a number of strong proposals for reopening the refinery are expected. Also, the Caribbean Gas Chemical Methanol to Dimethyl Ether Plant is expected to come on stream later this year.”
Housing bonds in 2 months
Imbert also said the first issue of the promised housing bonds would be due within the next two months at the rate of 4.5 per cent per annum over five years. Proceeds will be utilised to immediately accelerate the housing construction programme, with the proceeds from mortgages issued by the T&T Mortgage Finance Company (TTMF) being used to finance development and sale of houses on an ongoing basis.
Bonds will be offered to individuals in the first instance. The bond will be underwritten so that any bonds not subscribed by individuals will be placed with institutional investors on the secondary market after the close of the bond issue.
Initial investors with a minimum of $5,000 investment will receive priority for a housing unit, once that investor meets the Housing Development Corporation’s eligibility criteria.
“With over 75,000 qualified persons on HDC’s list, we expect to be able to assist a significant number of people,” he said.
He said eligible former Petrotrin employees will also soon benefit from a land distribution programme, involving ownership of residential lots and access to agricultural sites with associated financial support.
Imbert also announced intention to grant approval “in the very near future” to the Tobago House of Assembly to raise loan financing on the local market in the sum of $300 million for development projects, including health and sporting facilities, housing, roads and bridges, coastal protection and the THA’s innovative “Intelligent Island” ICT project.
On the term, he added, “Our success is the result of a vision conceptualised while we were out of office and resolutely and consistently implemented in office. This road hasn’t been easy; but I daresay no other road would have brought us such success...”
OTHER REVIEW NEWS:
• 2019 Budget’s oil price basis changed from US$65 to US$60.
• But with gas prices averaging US$3.26 per MMBtu over October 2018–April 2019, the gas price assumption has been revised upwards to US$3.00 per MMBtu from the budgeted US$2.75.
• Lower oil total revenue, initially budgeted at $47.72B, projected to fall to $47.50 billion.
• $1.87B added to Budget to provide funds for 18 ministries/divisions for suppliers/contractors/services.
• Revenue in the first half of 2019 was $706 million above the programmed revenue estimated in the context of the budgeted $47.72b.
• On the other hand, as a result of tight cash flow situation, expenditure in the first half of 2019 was $2.55 billion below programmed expenditure.
• Originally estimated fiscal deficit for 2019 was $4.05b; but for purposes of administration, with capital revenue programmed for the second half of the year, a deficit of $5.11b was programmed for the first six months of the year. However, the actual recorded deficit for the first half of 2019 was only $1.85b.
• Heritage and Stabilisation Fund (HSF) hit an all-time high of US$6.1b.
• Office of Procurement Regulation (OPR) has reached 95 per cent of its required staffing. Software application is being installed to facilitate establishment of a comprehensive database on public procurement, including information of tenders received, the award and value of contracts.
• The Procurement Depository expected to be accessible within the next three months.
• Detailed comments on redrafted procurement regulations will be submitted by the Finance Ministry to the Procurement Regulator in the next few days. Barring unforeseen circumstances, further proclamation of important sections of the act can be achieved by August 2019.
• Market assessment/feasibility studies on La Brea dry-dock and shipbuilding/ship repair facility on. If all goes well” public-private-partnership arrangement would be in place “in the near future.”
• Delivery of Couva Hospital health care will “commence shortly.”
• San Fernando to Point Fortin Highway completion scheduled for December 2020.
• Tobago airport terminal construction scheduled to commence in December 2019, with completion by early 2021.