The minister had also indicated an intention to allow employees of subsidiary companies to participate in the ESOP of the parent company. This proposal was also not implemented in the legislation. This measure which was expected to cost the Government $20 million was intended to serve as a further incentive to employees to participate in ESOPs. However, due to the omissions contained in the act it is doubtful whether the one amendment by itself would meet this objective. The chamber will continue to lobby for these amendments as the level of "savings" in this country is too low and measures to encourage savings will be welcomed.
Wear & Tear Allowances on "Class A" Assets
Assets in Class A of the Seventh Schedule of the ITA are eligible for wear and tear allowances at the rate of 10 per cent. These assets range from cash registers (manual) to PBX systems to adding machines and calculators. The act transfers to Class B all the assets listed in Class A with the exception of buildings. Assets in Class B qualify for wear and tear allowances at the rate of 25 per cent, hence allowing for accelerated depreciation of these assets. This measure, which is expected to cost the Government $10 million, was introduced as an incentive to further stimulate the manufacturing sector but would, in fact, apply to taxpayers generally. The chamber welcomes this initiative to support the ailing manufacturing sector.
Free Trade Zones
The T&T Free Zones Act specifically excluded activities involving an investment in excess of US$50 million from approval. This monetary restriction was removed by the act, thereby allowing for various large-scale projects to enjoy the myriad of tax benefits afforded under this legislation. This should be attractive to new business development with an export bias and should encourage more foreign direct investment.
Continued next week
