Gail Alexan­der

Se­nior Po­lit­i­cal Re­porter

The T&T As­so­ci­a­tion of Re­tired Per­sons (TTARP) has wel­comed Gov­ern­ment's plan to ex­empt pen­sions from tax­es and the Steel Work­ers' Union of T&T al­so wants Gov­ern­ment to "rewrite the wrong" and fa­cil­i­tate ben­e­fits for for­mer Arcelor/Mit­tal work­ers.

But ex-Peo­ple's Na­tion­al Move­ment min­is­ter in the Fi­nance Min­istry Bri­an Man­ning has ex­pressed con­cern about Gov­ern­ment's fi­nan­cial man­age­ment pat­tern.

This was among the feed­back from stake­hold­ers fol­low­ing Prime Min­is­ter Kam­la Per­sad-Bisses­sar's an­nounce­ment on Mon­day that Gov­ern­ment will re­view and amend the tax laws re­gard­ing pen­sions to re­flect fair­ness and recog­ni­tion of life­long con­tri­bu­tions. Per­sad-Bisses­sar said she be­lieved that once a per­son reach­es 60 and has been con­tribut­ing to the pen­sion sys­tem for decades, they should no longer be taxed on their re­tire­ment ben­e­fits.

There has been no re­sponse from the Fi­nance Min­istry to queries on the num­ber of per­sons re­ceiv­ing pen­sion who will ben­e­fit from the ex­emp­tion, or how much it will cost Gov­ern­ment.

In­dus­try sources not­ed there is a min­i­mum pub­lic ser­vice pen­sion of $3,500 and some pri­vate sec­tor com­pa­nies al­so have pen­sion funds. How­ev­er, they not­ed that NIS re­tire­ment ben­e­fits aren't taxed. Sources said the cost could be high if both pub­lic sec­tor and pri­vate sec­tor pen­sions are ex­empt­ed from tax­es.

For tax-free pub­lic ser­vice pen­sion, it's so far es­ti­mat­ed that to­tal tax loss could be $112, 347,000, which will ben­e­fit ap­prox­i­mate­ly 8,300 of­fi­cers, as 24, 971 of­fi­cers fall with­in the tax al­low­able brack­et and is cov­ered by the per­son­al al­lowance.

In 2025, the Cen­tral Bank re­port­ed­ly over­sees ap­prox­i­mate­ly 200 pen­sion plans in pub­lic and pri­vate sec­tors.

Mean­while, the TTARP, via a state­ment, said it wel­comes Per­sad-Bisses­sar's pro­pos­al.

"As an or­gan­i­sa­tion that rep­re­sents over 43,000 se­niors na­tion­wide, we strong­ly sup­port any ini­tia­tive aimed at eas­ing the fi­nan­cial bur­den faced by re­tirees," it said.

"Many of our mem­bers have ded­i­cat­ed decades of ser­vice to this coun­try and now live on fixed in­comes. The con­tin­ued tax­a­tion of their pen­sion in­come sig­nif­i­cant­ly re­duces their abil­i­ty to main­tain a ba­sic stan­dard of liv­ing, of­ten re­sult­ing in fi­nan­cial strain and hard­ship. We agree that such tax­a­tion can feel like a form of dou­ble tax­a­tion and fails to ho­n­our the con­tri­bu­tions made through­out their work­ing lives."

It added, "TTARP be­lieves that re­view­ing and amend­ing the cur­rent tax laws to re­flect the recog­ni­tion of life­long con­tri­bu­tions is both time­ly and just. We wel­come this sug­ges­tion and look for­ward to fur­ther dis­cus­sions and mean­ing­ful leg­isla­tive ac­tion on this is­sue in the near fu­ture."

Steel Work­ers Union pres­i­dent Tim­o­thy Bai­ley said, "We have no is­sue with the an­nounce­ment of Gov­ern­ment pen­sion re­form if it's re­spon­si­ble, sus­tain­able and if those who will be in re­ceipt of these ben­e­fits are de­serv­ing.

"We al­so call on our Gov­ern­ment, as a re­spon­si­ble Gov­ern­ment, to ac­knowl­edge that the steel work­ers, those alive and de­ceased, who were ter­mi­nat­ed in 2016 by the Arcelor­Mit­tal com­pa­ny af­ter serv­ing for as much as 36 years, are al­so de­serv­ing of com­pen­sa­tion/sep­a­ra­tion ben­e­fits for their ded­i­cat­ed years of ser­vice to that com­pa­ny."

Bai­ley added, "We ask that this Gov­ern­ment show em­pa­thy, some­thing that was ab­sent un­der the last regime, and in­ter­vene to make the nec­es­sary re­form to rec­ti­fy and rewrite this wrong that was done to law- abid­ing cit­i­zens by those who were guilty of the great­est crime against work­ers in T&T's re­cent his­to­ry."

Man­ning con­cerned

How­ev­er, for­mer min­is­ter Man­ning has some con­cerns about the plan.

"Re­duc­ing tax­es is all well and good but as I said dur­ing the TTRA de­bate in Par­lia­ment; gov­ern­ment on­ly has two sources of in­come: tax­es and en­er­gy roy­al­ties.

"We're al­ready pro­ject­ed to have one of the largest bud­get deficits in our his­to­ry by the end of this fis­cal year. Where will the rev­enues come from to sup­port this UNC Gov­ern­ment’s elec­tion promis­es and its pro­ject­ed in­creas­es in re­cur­rent ex­pen­di­ture?

"Al­most every­one who un­der­stands our econ­o­my is con­cerned. This Gov­ern­ment is in­creas­ing its re­cur­ring ex­pens­es and at the same time elim­i­nat­ing sev­er­al ma­jor sources of rev­enue; TTRA, Drag­on deal, and oth­er var­i­ous forms of tax­a­tion. That's un­sus­tain­able and will in­evitably lead to an in­vest­ment down­grade by the in­ter­na­tion­al cred­it rat­ing agen­cies and by the IMF."

He added, "That would mean an in­crease in in­ter­est rates for all, which will in­crease the cost of goods and ser­vices across the board. They're giv­ing with one hand while in­creas­ing the cost of liv­ing with the oth­er. The UNC is plac­ing our econ­o­my in a pre­car­i­ous po­si­tion and at some point, we will all have to pay the cost of their bad de­ci­sions."