Finance Minister Colm Imbert has presented a $52.4 billion Budget for fiscal 2022, which promises better food prices with the removal of Value Added Tax (VAT) from certain basic food items.
Small and medium businesses have also received a slew of incentives to revive them.
However, Minister Imbert said the number of valuation forms submitted to the Government by property owners is insufficient to start property tax collection. The tax, however, remains as a plan ahead and the Draft Estimates of Revenue estimates that the Government will raise $100 million from it.
The Government is also looking forward to the Regulated Industries Commission’s rate tariff review for 2021-2026 for the Electricity Commission (TTEC) and Water and Sewerage Authority (WASA).
Imbert detailed plans for 2022 to help various sectors recover and reopen after the last 19 months of the COVID-19 pandemic.
He recapped the pandemic’s toll on T&T and Government’s measures to deal with health and economic fallouts.
Noting T&T’s COVID cases are now lower than Jamaica’s and the Dominican Republic’s, he said Government doesn’t wish to delay the resumption of economic activities.
With Delta cases and the need to avoid COVID breakthrough cases, Imbert said vaccination programmes will continue into 2022.
Noting the planned reopening of safe zones next week, he called on the unvaccinated to get vaccinated as soon as possible to allow all sectors to open and allow the population to live with the virus.
“This Budget’s theme is ‘Resilience In The Face of a Global Pandemic’. We envisage full reopening of the economy in 2022,” Imbert added.
The $52.429B Budget is larger than the 2021 package of $45 billion.
Projected revenue for 2022 is $43.33 million.
Projected deficit is $9.096B or 5.8 per cent of GDP.
The Budget is based on an oil price of US$65 per barrel and gas price of $3.75 per MMBtu, higher than the 2021 basis of US$45 and US$3.79 per MMBtu.
Yesterday’s oil price was US$75-79 and $5.80 MMBtu.
Education took top dollar - $6.886B.
On “freeing up” certain food from VAT, Imbert said Government was well aware of significant food price increase but expects prices will subside to pre-pandemic ranges once transitory disturbances—such as trade and shipping issues—work their way out.
He said Government is examining the list of most commonly used foods to see where import duty can be removed without damaging local manufacturers.
Food that will be zero-rated from November 1 include biscuits, cooking oil, canned vegetables, cornflakes, canned fish/meat, curry, juice, sausages, ham, ketchup, bottled water, pigtail. Luxury foods like lobster clams, strawberries will still be VAT rated.
Imbert said no property tax is being collected now. Emphasis is on valuation of properties since the valuation rolls must have 50 per cent of properties on them before collection can start.
Government Ministers from ,left, Marvin Gonzales, Fitzgerald Hinds, Pennelope, Beckles and Terrence Deyalsingh gather after the budget presentation at the Red House, yesterday.
Imbert said 127, 969 valuation return forms have been submitted by owners/occupiers, “And although substantial, it’s insufficient to start tax collection.”
Initial focus was on residential properties. Strategies to access properties are now revised. A notice for return forms was issued last month with November deadline.
“We believe that resumption of the tax is long overdue and we envisage property tax collections as a significant revenue item for Local Government in the years ahead,” he said.
He didn’t say when the tax would start.
Imbert who said Government is looking forward to the RIC’s tariff review on TTEC also noted Wasa’s rates haven’t been adjusted since 1993. He said WASA is being repositioned with new structure and business model.
Imbert added, “We will introduce the market-based prices for electricity and water as recommended by the RIC, We’ll provide low-income and vulnerable groups with appropriate rebates in the first instance. We will develop and put in place a Utility Cash Card which will be made available to low-income and vulnerable groups to access subsidies for electricity and water, once the prices for these services are regularized.’’
A Fuel Cash Card will also be extended to the vulnerable to offset cost of increases in respect of the fuel usage upon liberalization of the fuel market. But Kerosene and LPG remain under fuel subsidy.
For 2022 Imbert increased the 25 per cent rebate on TTEC bills - of $300 or lower - to 35 per cent. The cost of water will also be offset similarly.
He detailed incentives to stimulate business particularly targetting small and medium enterprises unable to qualify for Government assistance last year.
Action on workers’, nurses’ issues, but Carnival uncertain
Among programmes for Tobago - which got a Budget allocation of $2.357B plus other sums - is a $50 million programme for its hotels sectors to recover.
Customs duty and VAT will also be removed on importation of batteries for electric cars with two year age limit.
Imbert has also instructed the Chief Personnel Officer to begin outstanding wage negotiations with the relevant trade union representatives for public service workers
He’s also told the CPO to investigate reports of nurses on temporary contracts and the implications of this where pension arrangements are concerned. He asked the CPO to recommend solutions to ensure their contracts are regularised. This is expected to be completed by end of December.
Expressions of interest have been issued for consultants to deal with long outstanding pensions for daily rated workers and this will be finalised in 2022.
Imbert said Carnival 2022 “if it moves forward” will present a formidable visitor experience. He projected all sporting events with fans will return in 2022 “But this depends on the success of the vaccination programme.”
TT is looking to host the ICC Men’s Under 19 Cricket World Cup match and is considering games in England’s tour of the West Indies in February.
Prime Minister Dr Keith Rowley arrives at the Red House to attend Parliament for the reading of the budget, yesterday. 10/4/21
Imbert said the financial sector remained stable despite severe macro-economic decline in the last two years. After the recession, the macroeconomics now looks positive as oil and gas recovered significantly from their initial low levels. “The impact on the domestic economy will be favourable. The decline will decelerate from 7.4 per cent to 1.4 per cent in 2021 and look forward to a strong recovery in 2022.”
Detailing yields from various energy projects and increased projections for natural gas Imbert projected higher energy revenue from higher prices and new energy sector outputs.
Finance will soon will review the full range of current Energy taxes, and examine licensing regimes and production sharing contracts to ensure T&T gets its fair share from energy resources.
Imbert’s three hours and 38 minutes delivery was punctuated by Opposition criticism.
Opposition leader Kamla Persad- Bissessar delivers her reply when debate continues Friday.
* Education/Training - $ 6.886B
* Health - $6.395B
* National Security -$ 5.664B
* Works - $3.577B
* Public Utilities - $2.671B
* Rural Development/Local Government - $1.65B
* Agriculture - $1.249B
* Housing - $610M
* Removing VAT/Customs duty on specified therapy /communication equipment for hearing/visually impaired
* Tax allowance for first-time homeowners
* Removal of remaining duties on computers/hardware
* Sale of 10m FCB shares
* Law for Unit Trust flexibility to “maximize returns on its investment”
* Licensing regime for gambling sector coming soon with first revenue in 2021.
* Procurement regulations will be debated soon.
* National Digital ID and accounts for citizens coming.
* Overweight trucks’ penalties rise from $750 to $8,000
* Five per cent tax reduction for significant exporters of local goods
* Loans for businesses with annual gross revenue between $500,000 and $25m where Government guarantees the entire loan. Repayment periods increase from five to seven years.
* Loans for buying company assets.
* Relaxed requirements for SMEs to be up to date with BIR and NIB records.
* Finance provides training for SMEs to manage records.
* Facilities continued for businesses operating with under $1m and for micro-businesses assisted by credit unions.
A Parliamentary police officer salutes national security minister Fitzgerald Hinds on his arrival to the Red House for the budget presentatgion in Parliament, yesterday.
* Five per cent tax reduction/other concessions for SMEs with technology solutions and digitisation and those in manufacturing with such projects.
* Research and development allowance for companies.
* 30 per cent tax credit for companies in carbon capture and enhanced oil recovery.
* Full tax holiday for new SMEs on Stock Exchange.
* Tax concession to encourage foreign companies to invest locally.
* Tax allowance up to $1m for corporate sponsorship of Heritage sites from QRC to Reform mandir.
* Home Mortgage Bank/HDC merger.
* Phoenix Park Estate completed in 2022 by Beijing construction. Chinese enterprises will have platform to expand to Latin American market.
* Steelbands to be tourism ambassadors.