Prime Minister Dr Keith Rowley says T&T has to cut costs to be able to live on the limited resources in the country.
"The conversation of the country has to be what action we will take to address the challenges. We have to cut to suit what we have," he said.
Rowley spoke on Wednesday night at the T&T Chamber of Commerce's first quarterly business dinner at the Hyatt Regency, Port-of-Spain.
He spoke about the sharp fall in the revenue of the country over the last eight years because of the collapse of energy prices.
Crude oil peaked at US $145 in July 2008, while in January 2016 it is hovering around US $30 a barrel.
He said 2008 was the year of T&T's largest earnings and now for fiscal year 2015 to 2016 the country has a budget of $63 billion.
To solve the gap between the country's needs and falling oil prices, the Government has to increase its tax collection potential to generate more revenue.
"This Government will move with alacrity to set up the Revenue Authority of T&T and this will improve the collection of taxes," he said.
He called the Property Tax "reasonable" and said it was needed to help raise extra revenue.
"This tax should bring in $300 million. We are committed to meet the expenditure of $62 billion. We are also improving the Government's ability to prosecute tax evasion," he said.
Apart from the economy, he also spoke about other challenges the country faced and said fighting crime remained the "number one" priority of the country.
"It is unacceptable that in T&T there are persons with firearms and there are three to four murders a day. Priority number one is the country's safety," he said.
The second priority of his Government was health and the third priority was education, he added.
He also promised the Government would spend less State resources on subsidising aspects of Carnival that the private sector could run.
"Less and less of public monies will be spent financing the commercial aspects of Carnival," he said.
He also said money laundering could potentially undermine the economy in the future and his Government would take measures to regulate the gaming industry.
The Prime Minister also defended the Government's move this week to remove VAT on basic food items, like milk, peanut butter and certain categories of flour and rice.
He made it clear that VAT was removed on certain categories of food like rice and flour and not all types as some people were claiming.
He joked that salt causes high blood pressure yet there were people complaining about VAT removal on that food product.
This week Finance Minister Colm Imbert announced that approximately 99 food items were removed from the Value Added Tax (VAT) zero-rated list and are back on the list of VAT items.
Rowley also said that citizens of the country must adjust some of their taste to consume more local foods that would result in less foreign exports.