The Trinidad and To­ba­go Man­u­fac­tur­ers’ As­so­ci­a­tion (TTMA) be­lieves that if the is­sue of out­stand­ing VAT re­funds is solved, this would go a long way in cre­at­ing con­fi­dence as well as en­sur­ing an en­abling en­vi­ron­ment to en­gage in busi­ness op­er­a­tions in T&T.

As such the TTMA yes­ter­day re­newed its call for the Gov­ern­ment to re­pay VAT re­funds owed to man­u­fac­tur­ers.

“I can say with­out reser­va­tion that it is be­com­ing crit­i­cal for the SMEs to re­ceive their VAT pay­ments,” TTMA pres­i­dent Tri­cia Coos­al said.

Ac­cord­ing to Coos­al, da­ta up to De­cem­ber in­di­cat­ed that $29.1 mil­lion was re­ceived in VAT re­funds with over $140 mil­lion still out­stand­ing to TTMA mem­bers.

Coos­al ex­plained the im­pact of de­layed VAT re­funds on busi­ness­es, par­tic­u­lar­ly SMEs.

“Last year, 2022, was a good year for ex­porters in T&T de­spite the chal­lenges faced with re­gard to de­layed pay­ment of VAT re­turns. How­ev­er, non-pay­ment of VAT cre­at­ed a sig­nif­i­cant cash flow chal­lenge for all man­u­fac­tur­ers but par­tic­u­lar­ly for the SME sec­tor in T&T.

“It is fun­da­men­tal­ly im­por­tant for the out­stand­ing VAT re­funds owed to the man­u­fac­tur­ing sec­tor to be pri­ori­tised as their cash flow is be­ing sig­nif­i­cant­ly af­fect­ed and in or­der for the con­tin­ued growth of the non-en­er­gy sec­tor, hav­ing cash to fa­cil­i­tate trans­ac­tions is im­per­a­tive,” Coos­al said.

Sig­nalling a need for a re­li­able sys­tem of pay­ments for VAT re­funds, Coos­al added, “The pay­ment of re­funds is not be­ing kept cur­rent. In fact, when the back­log of pay­ments be­gins to be dis­bursed, new pay­ments quick­ly start pil­ing back up, giv­en the in­ef­fi­cien­cies that ex­ist with­in the sys­tem.”

The man­u­fac­tur­ing sec­tor’s con­tri­bu­tion to GDP has steadi­ly in­creased over the past two years, the TTMA said, as it an­nounced it would con­tin­ue to lead its charge to dou­ble the ex­ports of the non-en­er­gy man­u­fac­tur­ing sec­tor by 2025.

“Time­ly VAT re­funds will al­low man­u­fac­tur­ers to fur­ther in­vest in ex­pan­sion of op­er­a­tions, up­grad­ing of equip­ment or even mar­ket ex­plo­ration, which can re­dound to the ben­e­fit of the for­eign ex­change earn­ing ca­pac­i­ty of T&T,” Coos­al stat­ed.

Cit­ing the IMF’s con­clud­ing state­ment is­sued at the end of an Ar­ti­cle IV con­sul­ta­tion with the T&T au­thor­i­ties, that a more ef­fi­cient for­eign ex­change in­fra­struc­ture will elim­i­nate forex short­falls, Coos­al said, “An ef­fi­cient VAT re­fund sys­tem will form part of the over­all in­fra­struc­ture, which will not on­ly al­le­vi­ate forex short­ages in T&T, but pro­vide need­ed cash flow to the busi­ness com­mu­ni­ty.

“This will al­low them ac­cess to an in­valu­able re­source to sus­tain and grow their op­er­a­tions, which can have a re­dound­ing im­pact on pro­duc­tion, em­ploy­ment and ex­ports of the coun­try.”