GAIL ALEXAN­DER

A mixed Bud­get bag for an­oth­er chal­leng­ing year.

Freeze on pub­lic sec­tor hir­ing, VAT on ap­ples and so-called “lux­u­ry” foods, curb on ve­hi­cle im­por­ta­tion, manda­to­ry Prop­er­ty Tax in­for­ma­tion—and pos­si­ble WASA and T&TEC rate hikes ahead.

But al­so: peo­ple earn­ing $7,000 and less won’t be pay­ing tax, free lap­tops and Mi-Fi de­vices for needy stu­dents and a slew of in­cen­tives to ex­pand tech­nol­o­gy busi­ness and jobs for youths.

Plus plans to pri­va­tise the Port Au­thor­i­ty op­er­a­tions and sell Na­tion­al Pe­tro­le­um gas sta­tions.

These were among plans which Fi­nance Min­is­ter Colm Im­bert an­nounced in his 2021 Bud­get yes­ter­day. In a three-hour-plus ad­dress to the Par­lia­ment, Im­bert pro­mot­ed his pack­age.

“This Bud­get re­flects our un­der­stand­ing of the re­quire­ments of our coun­try for the medi­um-term to en­sure that our eco­nom­ic re­cov­ery is as strong as pos­si­ble,” he said dur­ing the Bud­get, themed “Re­set­ting the Econ­o­my for Growth and In­no­va­tion.”

The pack­age is meant to kick­start T&T to move on from the past fis­cal year’s cri­sis caused by en­er­gy price shocks and COVID-19 pan­dem­ic costs.

Some im­me­di­ate com­ments in­di­cat­ed the pack­age wasn’t as bad as Gov­ern­ment’s re­cent warn­ings on the econ­o­my had led peo­ple to be­lieve it would be. Oth­ers, like UNC’s Vas­ant Bharath, said it was “lack­lus­tre, non­de­script, unin­spir­ing and di­rec­tion­less.”

The 20201 Bud­get ex­pen­di­ture is set at $49.73 bil­lion and rev­enue pro­ject­ed at $41.364 bil­lion - both less than 2020 Bud­get lev­els. Im­bert pro­ject­ed the deficit as $8.2 bil­lion.

The Bud­get is based on an oil price of US$45 per bar­rel and a gas price of US$3 per mmb­tu.

Finance Minister Colm Imbert, Prime Minister Dr Keith Rowley and Attorney general Faris Al-Rawi in the Parliament for the presentation of the Budget.

Parliament of Trinidad and Tobago

Im­bert said 2020 was an ex­cep­tion­al­ly dif­fi­cult year and the deficit for that was $16 bil­lion—some $10b more than an­tic­i­pat­ed for that year. Fi­nanc­ing of that deficit, just over $6 bil­lion, has been with­drawn from the Her­itage and Sta­bil­i­sa­tion Fund.

Ed­u­ca­tion re­ceived the high­est al­lo­ca­tion in the Bud­get—$7.937 bil­lion.

To­ba­go, where House of As­sem­bly elec­tions will be held in Jan­u­ary, re­ceived $2.34b, slight­ly more than the $2.283 al­lo­cat­ed in the 2020 Bud­get.

Im­bert said 2021 is ex­pect­ed to be an­oth­er chal­leng­ing year but Gov­ern­ment’s ob­jec­tive is to keep the econ­o­my stim­u­lat­ed and keep “as many peo­ple em­ployed as pos­si­ble. The longer the econ­o­my re­mained at rest, the longer it would take to get go­ing.”

First among an­nounce­ments, Im­bert put the pub­lic on no­tice for col­lec­tion of the Prop­er­ty Tax next year.

He said: “Gov­ern­ment has been work­ing as­sid­u­ous­ly to pro­duce the re­quired Val­u­a­tion Rolls notwith­stand­ing nu­mer­ous chal­lenges. To ex­pe­dite the process and val­i­date in­for­ma­tion on the Val­u­a­tion Roll, the Com­mis­sion­er of Val­u­a­tion will in the near fu­ture be mak­ing manda­to­ry re­quests of prop­er­ty own­ers un­der Sec­tion 29 of the Val­u­a­tion of Land Act for the pro­vi­sion of in­for­ma­tion in an ap­pro­pri­ate for­mat.

“The ob­jec­tive is to com­mence the col­lec­tion of Prop­er­ty Tax in fis­cal 2021, start­ing with res­i­den­tial prop­er­ties. We con­tin­ue to as­sure prop­er­ty own­ers the rates will be both fair and rea­son­able and will not present an oner­ous bur­den on them. Tax­a­tion of com­mer­cial, in­dus­tri­al and agri­cul­tur­al prop­er­ties will fol­low, in that or­der.”

In the Gov­ern­ment sec­tor, he said ef­fec­tive Oc­to­ber 6, “we’re freez­ing the fill­ing of all va­cant posts in the pub­lic sec­tor for one year.”

Finance Minister Colm Imbert delivers the 2020/2021 fiscal package in the Red House yesterday. In the foreground is Prime Minister Dr Keith Rowley.

OFFICE OF THE PARLIAMENT

Oth­er an­nounce­ments he gave on T&TEC and WASA have prompt­ed con­cern on pos­si­ble price in­creas­es ahead.

On T&TEC, he said, “We con­sid­er that the up­com­ing tar­iff re­view should re­sult in in­creas­ing lev­els of tar­iffs for elec­tric­i­ty sup­ply as be­ing es­sen­tial for en­hanc­ing in­vest­ment and for en­sur­ing a re­li­able dis­tri­b­u­tion and trans­mis­sion sys­tem.”

On WASA, Im­bert not­ed a Cab­i­net Sub-Com­mit­tee is now fo­cus­ing on is­sues which are im­ped­ing the au­thor­i­ty from meet­ing T&T’s needs.

“The com­mit­tee will re­view WASA’s op­er­a­tions, in­clud­ing its un­sus­tain­able debt po­si­tion, its age­ing pipelines, its gov­er­nance struc­ture and the in­ad­e­quate wa­ter dis­tri­b­u­tion,” Im­bert said.

“We en­vis­age a re­port by No­vem­ber 30, which would in­clude rec­om­men­da­tions with re­spect to lev­els of in­vest­ments ad­e­quate to the needs of an ef­fi­cient wa­ter sup­ply and we will take such de­ci­sions, in­clud­ing a tar­iff re­view, which are nec­es­sary for WASA to raise the wa­ter sup­ply to our com­mu­ni­ties”

While Im­bert an­nounced no gaso­line price hike, he con­firmed a lib­er­al­i­sa­tion of the fu­el mar­ket from Jan­u­ary 2021, when fixed re­tail mar­gins for all liq­uid pe­tro­le­um prod­ucts will be re­moved. Pe­tro­le­um re­tail­ers and deal­ers will be al­lowed to fix their own mar­gins then.

He added, “Whole­sale mar­gins will re­main fixed for the time be­ing and an ap­pro­pri­ate but rea­son­able tax will be in­tro­duced to com­pen­sate for the cur­rent fu­el sur­plus that is gen­er­at­ed on the sale of gaso­line be­cause of de­pressed oil prices.

“The net re­sult should be lit­tle or no in­crease in the price of mo­tor fu­els at cur­rent oil prices. How­ev­er, if the price of oil re­cov­ers, the price of gaso­line and diesel will nat­u­ral­ly in­crease pro­por­tion­ate­ly.”

In this plan, Im­bert al­so an­nounced all NP gas sta­tions will be put up for sale with first op­tion to ex­ist­ing deal­ers.

To in­crease the VAT base, Fi­nance Min­is­ter Im­bert said the 12.5 per cent tax will now ap­ply to lux­u­ry im­port­ed foods from Jan­u­ary.

“... Such as lob­ster, es­car­got, smoked salmon, pâté, clams, straw­ber­ries, cham­pagne, ap­ples and grapes from Jan­u­ary 1,” he said.

Im­bert al­so an­nounced moves to curb de­mand for pur­chase of new/used cars, which he said was cost­ing T&T $2.5 bil­lion per year in for­eign ex­change.

ABRAHAM DIAZ

“To cor­rect this un­sus­tain­able sit­u­a­tion and sup­press de­mand, as op­posed to an out­right pro­hi­bi­tion, we pro­pose to re­move all tax con­ces­sions on the im­por­ta­tion of pri­vate mo­tor cars. All pri­vate mo­tor cars will now at­tract cus­toms du­ty, mo­tor ve­hi­cle tax and Val­ue Added Tax, with the low­est rates of du­ty and tax be­ing im­posed on hy­brid cars, elec­tric cars, CNG cars, and small en­gine cars be­low 1,500cc, to en­cour­age their use. This be­gins Oc­to­ber 20.”

But tax con­ces­sions will re­main in place for com­mer­cial and in­dus­tri­al ve­hi­cles and pub­lic trans­port ve­hi­cles.

He added, “Fur­ther, in Jan­u­ary 2021, the per­mis­si­ble age of im­port­ed for­eign used cars will be re­duced to three years and the quo­tas for the im­por­ta­tion of used cars re­duced by 30 per cent. A quo­ta sys­tem will al­so be in­tro­duced for the im­por­ta­tion of new cars in Jan­u­ary 2021.

Im­bert al­so an­nounced in­creas­ing the per­son­al in­come tax ex­emp­tion lim­it from $72,000 to $84,000 per year start­ing Jan­u­ary—those earn­ing $7,000 a month or less will now be ex­empt from in­come tax. He said this will stim­u­late the de­mand side of the econ­o­my.

Along with ini­tia­tives to as­sist on­line teach­ing, Im­bert said $50 mil­lion is be­ing al­lo­cat­ed to pro­vide lap­tops for needy stu­dents.

In recog­ni­tion of the fact that the cre­ative sec­tor is the last to re­open, Im­bert said artistes will get a $5,000 grant. The Salary Re­lief Grant for oth­er peo­ple will al­so be ex­tend­ed to De­cem­ber.

He an­nounced a 10-year hous­ing plan with of­fer­ings cost­ing from a low of $250,000 to $1.5m for young up­ward­ly mo­bile buy­ers.

Im­bert al­so clamped down on cig­a­rette us­age. Not­ing T&T spends $500,000 per year to treat one lung can­cer pa­tient, he said, “We’re in­tro­duc­ing dis­in­cen­tives to con­strain smok­ing habits.”

Ex­cise and cus­toms du­ty on to­bac­co prod­ucts will be in­creased from Oc­to­ber 20. All penal­ties for sell­ing al­co­hol and to­bac­co to mi­nors will al­so be in­creased from Jan­u­ary 1, 2021.

Finance Minister Colm Imbert delivers the 2020/2021 fiscal package in the Red House yesterday.

OFFICE OF THE PARLIAMENT

On plans to pri­va­tise the Port Au­thor­i­ty, he said Gov­ern­ment de­cid­ed to adopt the ap­proach with the Port re­tain­ing its reg­u­la­to­ry and as­set man­age­ment func­tions, but with man­age­r­i­al, op­er­a­tional and fi­nan­cial re­spon­si­bil­i­ty for com­mer­cial ac­tiv­i­ties - such as ter­mi­nals and equip­ment in the port area—un­der a new in­vestor.

“The Works Min­istry will take im­me­di­ate steps to ra­tio­nalise by the end of fis­cal 2021, the op­er­a­tions of the Port and in­tro­duce a pri­vate sec­tor op­er­a­tor in­to the Port han­dling op­er­a­tions, leav­ing the fer­ry ser­vice to the T&T In­ter-Is­land Com­pa­ny Lim­it­ed.

Re­tire­ment age may move to 65

Fi­nance Min­is­ter Colm Im­bert paint­ed an op­ti­mistic pic­ture of T&T’s path and the en­er­gy sec­tor.

But he said look­ing for­ward, “there is a high de­gree of un­cer­tain­ty about our eco­nom­ic re­cov­ery and medi­um-term out­look. I’m in no doubt the full suc­cess of pro­grammes and poli­cies which I’ve just laid out would de­pend on our con­tain­ment of the COVID virus; more so on a med­ical break­through with the avail­abil­i­ty of af­ford­able, safe and ef­fec­tive vac­cines.”

“But we’re as­sured that with firm and de­ci­sive man­age­ment fo­cused on the main el­e­ments of our eco­nom­ic pro­gramme, we will emerge in much bet­ter shape in 2021-2022,” he said.

Im­bert said con­sid­er­a­tion will be giv­en to ex­tend­ing the re­tire­ment age to 65 in pro­posed leg­is­la­tion to main­tain the Na­tion­al In­sur­ance Board and its fa­cil­i­ties. He called for Op­po­si­tion sup­port for this leg­is­la­tion as well as for oth­ers on the T&T Rev­enue Au­thor­i­ty, gam­ing sec­tor, the Na­tion­al Sta­tis­ti­cal In­sti­tute, Pro­cure­ment and Pub­lic Ad­min­is­tra­tion op­er­a­tions.

Im­bert, who spoke from a plas­tic-shield­ed speak­ing booth - un­der COVID pro­to­cols- en­coun­tered Op­po­si­tion cross-talk through­out his ad­dress. Op­po­si­tion leader Kam­la Per­sad-Bisses­sar will re­ply on his Bud­get on Fri­day morn­ing.