​Raphael John-Lall

The cost of liv­ing may go up in T&T in 2026 be­cause of some of the mea­sures in­tro­duced in the bud­get which was pre­sent­ed in Oc­to­ber.

This is the view of Leader of the Move­ment for So­cial Jus­tice (MSJ) and econ­o­mist David Ab­du­lah who spoke last Thurs­day at the Cipri­ani Col­lege of Labour and Co-op­er­a­tive Stud­ies which held its post-bud­get sem­i­nar en­ti­tled “The im­pact of the bud­get on the av­er­age cit­i­zen of T&T” at its Val­sayn cam­pus.

Dur­ing his bud­get pre­sen­ta­tion in Oc­to­ber, Fi­nance Min­is­ter Dav­en­dranath Tan­coo an­nounced two ma­jor fis­cal mea­sures aimed at boost­ing state rev­enue and pro­mot­ing ac­count­abil­i­ty — the land­lord busi­ness sur­charge and an elec­tric­i­ty sur­charge.

Re­act­ing to these mea­sures, Ab­dul­lah said al­though it will be land­lords and busi­ness own­ers pay­ing these tax­es, work­ing peo­ple may have to pay in­di­rect­ly when busi­ness own­ers and land­lords raise the cost of the ser­vices they of­fer.

In the bud­get, the Gov­ern­ment pro­posed the in­tro­duc­tion of an elec­tric­i­ty sur­charge as a tar­get­ed fis­cal mea­sure to ad­dress the grow­ing cost of elec­tric­i­ty sub­si­dies and pro­mote ef­fi­cien­cy in en­er­gy use. The sur­charge will take the form of a fixed, bill-lev­el charge of $0.05 per kWh for Com­mer­cial Cus­tomers and In­dus­tri­al Cus­tomers.

The pol­i­cy is de­signed to en­cour­age en­er­gy con­ser­va­tion, re­duce the Gov­ern­ment’s sub­sidy bur­den and gen­er­ate a pre­dictable rev­enue stream.

“Now, they came in on a cam­paign that they were not go­ing to in­crease elec­tric­i­ty rates, wa­ter rates, no new tax­es. That was a cam­paign promise. But in fact, they are im­pos­ing in­creas­es in elec­tric­i­ty rates not for house­hold­ers but for com­mer­cial and in­dus­tri­al users of a search charge of five cents per kilo­watt hour. They plan to raise $270 mil­lion from that,” Ab­du­lah said.

He ar­gued that busi­ness­es would then pass these ad­di­tion­al over­head costs to con­sumers.

“The ques­tion is when the elec­tric­i­ty rates are in­creased for in­dus­tri­al more par­tic­u­lar­ly com­mer­cial users which would be restau­rants, su­per­mar­kets and a whole host of firms like that, how will those busi­ness peo­ple then deal with their in­creased elec­tric­i­ty rates? Let’s as­sume their elec­tric­i­ty rates go up by 10 per­cent. As­sum­ing that the elec­tric­i­ty rates for busi­ness­es may on­ly be one or two per­cent of the over­all cost of run­ning the busi­ness. So, they shouldn’t re­al­ly in­crease prices for con­sumers. So, we’re go­ing to have to wait and see come Jan­u­ary 1.”

Ab­dul­lah al­so re­ferred to a po­ten­tial in­crease in how much peo­ple pay in rent for apart­ments and hous­es.

Dur­ing the bud­get, Tan­coo said there has been an “ex­plo­sion” of un­reg­is­tered com­mer­cial and res­i­den­tial rental prop­er­ties, with many land­lords evad­ing their fair share of tax­es. This, he not­ed, has re­sult­ed in sig­nif­i­cant rev­enue loss and un­re­li­able da­ta for pol­i­cy-mak­ing.

To ad­dress the is­sue, land­lords will pay an in­creased tax—a busi­ness sur­charge from Jan­u­ary 1, 2026. The land­lord busi­ness sur­charge re­quires that each land­lord reg­is­ters with the Board of In­land Rev­enue and pay a one time reg­is­tra­tion fee of $2,500.

Then the sur­charge will be ap­plied as fol­lows: 2.5 per cent of the gross an­nu­al rental in­come of $20,000 or less; 3.5 per cent of the gross an­nu­al rental in­come ex­ceed­ing $20,000. The mea­sure is ex­pect­ed to yield $70 mil­lion.

“That’s sig­nif­i­cant. So, peo­ple who are rent­ing in an apart­ment, a lot of peo­ple rent an apart­ment or rent a home as the case may be. When the sur­charge hits the land­lord, what is the land­lord go­ing to do in terms of try­ing to re­cov­er some of that cost and what would that mean to those who have to rent? These are things that we’re go­ing to have to wait and see,” Ab­du­lah said.

He al­so spoke about the price of al­co­hol.

“One of the oth­er ar­eas, of course, is the is­sue of… the price of al­co­hol has gone up. And to what ex­tent is that go­ing to af­fect the hos­pi­tal­i­ty sec­tor, par­tic­u­lar­ly go­ing in­to Car­ni­val? You now have oth­er things that have come out­side the bud­get.”

For­mer sen­a­tor and di­rec­tor of the Lloyd Best In­sti­tute, Suni­ty Ma­haraj, who al­so spoke at the post-bud­get fo­rum, lament­ed that T&T seems to be hav­ing a nev­er-end­ing de­bate about di­ver­si­fi­ca­tion and job cre­ation which should have hap­pened decades ago.

“The fail­ure comes back to the fail­ure to trans­form the econ­o­my. We have known since the 1980s the need for eco­nom­ic trans­for­ma­tion and trans­for­ma­tion of the pub­lic sec­tor in or­der to stim­u­late job cre­ation and busi­ness­es out­side of the pub­lic ser­vices. The pub­lic ser­vice was the on­ly place peo­ple could have got­ten a job and steady pen­sion.”

She not­ed these changes and said the glob­al econ­o­my no longer op­er­ates in that way.

“And busi­ness­es used to be ei­ther you’re in big busi­ness, you’re in mer­chant, you’re in the mer­chant class. You’re im­port­ing cheap and sell it or you run a lit­tle par­lour and so on but the whole pe­ri­od of all this mon­ey that we earned from oil and gas was sup­posed to car­ry the econ­o­my from a ba­sic lev­el busi­ness op­er­a­tion to man­u­fac­tur­ing to in­dus­tri­al­i­sa­tion.”

She al­so called on the Gov­ern­ment to play its part in sup­port­ing lo­cal busi­ness­es and lo­cal prod­ucts.

“The sin­gle largest buy­er of goods is the gov­ern­ment. I mean the Gov­ern­ment buys food for all the pa­tients in hos­pi­tals, all pris­on­ers in the jails, all the po­lice­men, the army, schools and the Gov­ern­ment is al­ways hav­ing work­shops and con­fer­ences and they have re­cep­tions.

“The Gov­ern­ment could say they are es­tab­lish­ing a lo­cal con­tent pol­i­cy and they are the ones who can be say­ing on every dol­lar spent for food by the Gov­ern­ment, put a fig­ure 80 per cent or 50 per cent or what­ev­er per­cent has to be for lo­cal pur­chas­es be­cause it’s a mas­sive amount of mon­ey they spend on food.”

Ma­haraj said T&T is in an “un­cer­tain state” be­cause of the con­flict be­tween the US and Venezuela as well as oth­er in­ter­na­tion­al fac­tors.

“The en­tire re­gion is in that sit­u­a­tion where you have no idea what is go­ing to be pos­si­ble next year and what is not go­ing to be pos­si­ble and that is a state of un­cer­tain­ty that has been com­pound­ed by the US ag­gres­sion against Venezuela in­to which we have been dragged. Al­so, with glob­al con­di­tions, there’s a lot of un­cer­tain­ty. It is re­al­ly a pe­ri­od of fun­da­men­tal change in the world and the glob­al econ­o­my.”