An­drea Perez-Sobers

Se­nior Re­porteran­drea.perez-sobers

@guardian.co.tt

For­mer fi­nance min­is­ter Colm Im­bert has warned that Trinidad and To­ba­go faces a grow­ing risk of a cred­it rat­ing down­grade, ar­gu­ing that the Gov­ern­ment is down­play­ing con­cerns raised by Stan­dard & Poor’s (S&P) and fail­ing to ad­dress deep­er weak­ness­es in the econ­o­my.

Speak­ing at the Op­po­si­tion’s news con­fer­ence yes­ter­day, Im­bert said the coun­try’s lat­est sov­er­eign cred­it as­sess­ment should serve as a warn­ing rather than a vic­to­ry lap. He not­ed that in­ter­na­tion­al cred­it rat­ings are es­sen­tial when­ev­er gov­ern­ments bor­row on in­ter­na­tion­al mar­kets, cit­ing the US$1 bil­lion loan se­cured ear­li­er this year and the re­cent US$800 mil­lion bond is­sue.

He said while S&P reaf­firmed Trinidad and To­ba­go’s in­vest­ment-grade BBB- rat­ing on Ju­ly 22, the agency al­so main­tained a neg­a­tive out­look and warned there is a one-in-three chance of a down­grade over the next 12 months if pub­lic fi­nances are not strength­ened, bal­anced eco­nom­ic growth is not achieved and the coun­try’s ex­ter­nal po­si­tion weak­ens.

“The neg­a­tive out­look re­flects the pos­si­bil­i­ty of a down­grade, ab­sent mean­ing­ful and time­ly steps to strength­en pub­lic fi­nances, en­sure bal­anced eco­nom­ic growth, and main­tain the coun­try’s strong ex­ter­nal pro­file,” Im­bert quot­ed from the S&P re­port.

He re­ject­ed the Min­istry of Fi­nance’s po­si­tion that the coun­try’s eco­nom­ic chal­lenges were in­her­it­ed from the pre­vi­ous ad­min­is­tra­tion, in­sist­ing the rat­ing agency’s re­port does not sup­port that con­clu­sion.

The Min­istry of Fi­nance, in a state­ment is­sued last week, wel­comed S&P’s de­ci­sion to reaf­firm the BBB- in­vest­ment-grade rat­ing, say­ing it pre­served T&T’s stand­ing with in­ter­na­tion­al in­vestors and re­flect­ed the coun­try’s favourable ex­ter­nal po­si­tion, strong ex­ter­nal cred­i­tor sta­tus and sub­stan­tial na­tion­al as­sets, in­clud­ing the Her­itage and Sta­bil­i­sa­tion Fund.

Im­bert ar­gued that a clos­er read­ing of the S&P re­port paints a more trou­bling pic­ture. He said the agency cit­ed weak­en­ing fis­cal and ex­ter­nal buffers, lim­it­ed eco­nom­ic di­ver­si­fi­ca­tion and pro­ject­ed the econ­o­my would con­tract by two per cent in 2026 af­ter es­ti­mat­ing neg­a­tive growth in 2025.

He al­so ac­cused the Gov­ern­ment of sup­ply­ing in­ac­cu­rate eco­nom­ic da­ta to the In­ter­na­tion­al Mon­e­tary Fund, claim­ing S&P re­lied in­stead on what he de­scribed as more cred­i­ble growth es­ti­mates de­vel­oped through its own re­search.

Turn­ing to tax pol­i­cy, Im­bert crit­i­cised the Gov­ern­ment over con­fu­sion sur­round­ing the tax­a­tion of cor­po­rate pen­sion plans.
Im­bert ar­gued that the leg­is­la­tion does not ex­empt every type of cor­po­rate pen­sion arrange­ment, par­tic­u­lar­ly em­ploy­er-fund­ed cor­po­rate de­ferred an­nu­ity plans.
“The law makes it clear that these plans have to be pur­chased by the in­di­vid­u­als and not the com­pa­ny,” he said, adding that the leg­is­la­tion would have to be amend­ed to re­move the un­cer­tain­ty.

In a news re­lease on Tues­day, he As­so­ci­a­tion of Trinidad and To­ba­go In­sur­ance Com­pa­nies (AT­TIC) said cor­po­rate de­ferred an­nu­ities gen­er­al­ly do not qual­i­fy for the new in­come tax ex­emp­tion on pay­outs that took ef­fect Jan­u­ary 1, 2026.

This is be­cause cor­po­rate de­ferred an­nu­ities (such as those ap­proved un­der Sec­tion 134(6) of the In­come Tax Act) are owned by the com­pa­ny and the em­ploy­er is the ap­pli­cant and pol­i­cy own­er as the com­pa­ny pays the pre­mi­ums on be­half of the em­ploy­ee. The em­ploy­ee is the an­nu­i­tant/ben­e­fi­cia­ry but does not per­son­al­ly pur­chase the plan.