Government’s rescue mission to “keep people alive” amid the COVID-19 threat will be reinforced next week with the start of payout of Income Tax returns to people owed $20,000 and less. VAT return payments will also begin for small and medium businesses owed $250,000 and under.
Finance Minister Colm Imbert deemed the plans part of Government’s “rescue mission” as he spoke Wednesday in Parliament on legislation to facilitate the payouts and reconfigure the Heritage and Stabilisation Fund (HSF).
The HSF is being changed to allow access to funds, rather than waiting a year as under previous law. Government is sourcing US$1.1 billion from the HSF for “rescue” work. The reconfiguration will allow any government to access funds when a disaster area is declared, when a dangerous infectious disease exists and when there’s a likelihood of a huge oil revenue drop. T&T has two of those conditions.
Imbert said, “A catastrophic situation faces us—we’ve been hit by the double-whammy of natural gas price reduction plus oil price fall; both half of what was budgeted for. Since we’re largely a gas economy it’s taken a huge toll. With closures caused by the COVID-19 virus, social distancing and quarantine—the result will be cataclysmic. So we had to change the way we withdraw from the fund.
“Our primary objective is to keep people in jobs, give them salaries and assistance - to keep people alive!”
Government’s plan includes $1 billion for social support plans, $1b for accelerating VAT return payments and $400 million to accommodate increased tax refunds. By the end of next week, income tax returns will begin for the 9,397 people owed $20,000 and less.
The current total VAT refunds owed is $6.2 billion. Imbert said out of 10,160 businesses owed, 10,088 are owed less than $10m and 72 businesses are owed $5 billion.
“We decided to help small and medium businesses, as they can’t help themselves in times of crisis,” Imbert said.
Payment, beginning by the end of next week, covers the 92 per cent of businesses owed $250,000 and less. Government’s also paying state contractors and suppliers and is clearing bills owed to janitorial, security and basic supplies companies, including for pharmaceuticals and medical equipment.
It will also take a week to establish criteria for the proposed $1,500 salary grant (over the next three months) for the estimated 80,000 people in bars, tourism, food industry, casinos and clubs likely to lose jobs immediately amid the COVID crisis.
Imbert said Government did not know what would happen with the economy—since China, a large hydrocarbon consumer, was hit by COVID. He didn’t know how long the crisis may last. The oil revenue loss will be substantial, he added, “But it’s difficult to say what it will be.”
“This is uncharted territory, brand new, a new world, like after World War Three. We in T&T have to look after ourselves ... this legislation’s essential to do so.”