Advertise With Us
About Us
Listen
Watch

Login

/

Subscribe

Home

News

Carnival

Business

Sports

E-Paper

Features

Opinion

Traffic Cameras

Life

Classifieds

Death Notices

Community

Real Estate

About Us

Contact Us

Home
News
Carnival
Sports
E-paper
Business
Classifieds
Other
Death Notices
Traffic Cameras
Covid-19
Features
Opinion
Games
Subscriptions
Real Estate

IDB urges regional governments to defer income tax payments

by

#meta[ag-author]
Joel Julien
20200415220714
20200415

Gov­ern­ments should con­sid­er the de­fer­ral of in­come tax­es to help their cit­i­zens at this time, the In­ter-Amer­i­can De­vel­op­ment Bank (IDB) has stat­ed.

And if their shoul­ders are big enough, they should even con­sid­er tax re­lief for com­pa­nies, the IDB stat­ed.

These sug­ges­tions were made in the IDB’s 2020 Latin Amer­i­can and Caribbean Macro­eco­nom­ic Re­port which was pub­lished this week.

“The first line of at­tack should be con­tain­ment and mit­i­ga­tion of the coro­n­avirus by re­vamp­ing health ex­pen­di­ture for ef­fec­tive pre­ven­tion, de­tec­tion, treat­ment, and con­tain­ment,” the IDB stat­ed.

“The main chal­lenge is to avoid a health in­fra­struc­ture col­lapse. The time for growth will come lat­er. Giv­en ex­ist­ing bud­get con­straints, stan­dard macro­eco­nom­ic stim­u­lus poli­cies should not be pri­ori­tised, par­tic­u­lar­ly be­cause many of them may not be ef­fec­tive giv­en the na­ture of the coro­n­avirus cri­sis. If at all, in­fra­struc­ture in­vest­ment should be strict­ly tar­get­ed at the health sec­tor,” it stat­ed.

Ear­li­er this week Prime Min­is­ter Dr Kei­th Row­ley vis­it­ed some of the fa­cil­i­ties that have been ear­marked as part of T&T’s na­tion­al re­sponse to COVID-19.

Among the fa­cil­i­ties vis­it­ed by Row­ley were the new Ari­ma Gen­er­al hos­pi­tal, the Na­tion­al Rac­quet Cen­tre in Tacarigua which has been con­vert­ed to a 50-bed step-down fa­cil­i­ty, and the Na­tion­al Acad­e­my for the Per­form­ing Arts which will be used to house med­ical staff.

“These prepa­ra­tions were not by ac­ci­dent. It was by care­ful ad­vanced plan­ning, dri­ven by the pro­fes­sion­al as­sess­ment of our pub­lic health care of­fi­cers who, very ear­ly in Jan­u­ary, ad­vised the gov­ern­ment and our plan­ning be­gan since then,” the Of­fice of the Prime Min­is­ter stat­ed.

The Cou­va Hos­pi­tal and the Cau­ra Hos­pi­tal are al­so al­ready be­ing utilised as a par­al­lel health care sys­tem to deal with COVID-19.

“Ad­di­tion­al­ly, many peo­ple will lose their in­come while un­der lock­down at home. This makes it im­per­a­tive to de­sign sub­sidy pro­grammes that are well tar­get­ed to vul­ner­a­ble groups, par­tic­u­lar­ly the poor and in­for­mal work­ers. Giv­en past ex­pe­ri­ence, it is key that these pro­grams be de­signed as tem­po­rary, with sep­a­rate ac­counts from oth­er struc­tur­al trans­fer pro­grams, in­clud­ing sun­set claus­es. Trans­paren­cy in the ad­min­is­tra­tion of this pol­i­cy is al­so es­sen­tial,” the IDB stat­ed.

Last week the gov­ern­ment in­tro­duced the first phase of the Salary Re­lief Grant which will be ac­ces­si­ble to cit­i­zens who ei­ther lose their jobs or are tem­porar­i­ly out of work be­cause of COVID-19.

That grant is val­ued at $1,500 a month and is ex­pect­ed to last for three months.

The first phase of the grant is avail­able to peo­ple who are reg­is­tered with the Na­tion­al In­sur­ance Board data­base.

The sec­ond phase is ex­pect­ed to tar­get self-em­ployed per­sons and oth­ers who are not reg­is­tered with the NIB.

A start date for the sec­ond phase has so far not been an­nounced.

But while T&T has ticked off the box­es when it comes to these fis­cal mea­sures one as­pect has not been im­ple­ment­ed as yet.

And that is the pos­si­bil­i­ty of tax de­fer­rals.

“Oth­er pos­si­ble mea­sures for gov­ern­ments with big enough shoul­ders in­clude tax re­lief poli­cies for re­gions, peo­ple, and firms more fierce­ly struck by the shock.

“De­fer­ral of labour tax­es and so­cial se­cu­ri­ty con­tri­bu­tions should al­so be con­sid­ered. So­cial se­cu­ri­ty sys­tems that have pro­vid­ed loans to pen­sion­ers could tem­porar­i­ly de­fer pay­ments com­ing due,” the IDB stat­ed.

“In all cas­es, it is key that these mea­sures be im­ple­ment­ed as de­fer­rals rather than per­ma­nent sub­si­dies so as not to jeop­ar­dise fis­cal sus­tain­abil­i­ty.

“These poli­cies should be con­sid­ered as liq­uid­i­ty al­le­vi­a­tion mea­sures, but they should not turn in­to a li­a­bil­i­ty for gov­ern­ments. Mak­ing poli­cies as sus­tain­able as pos­si­ble is key if gov­ern­ments want to have a strong re­cov­ery once the worst part of the coro­n­avirus cri­sis is over. The more sus­tain­able they emerge, the bet­ter their chances of ob­tain­ing fi­nanc­ing for growth lat­er on,” it stat­ed.

Asked about the pos­si­bil­i­ty of tax de­fer­rals two Mon­days ago, Fi­nance Min­is­ter Colm Im­bert said the coun­try would be cut­ting off its nose to spoil its face if this was done since we are in a bad way fi­nan­cial­ly be­cause of the dra­mat­ic col­lapse in oil prices in­ter­na­tion­al­ly cou­pled with re­duced in­come from nat­ur­al gas.

Im­bert said this coun­try is ex­pect­ed to have a short­fall in bud­get­ed rev­enue of around $7 bil­lion this fis­cal year.

“If we were to say yes we will de­fer col­lec­tion of tax­es, we will al­low peo­ple not to pay tax­es then where is the mon­ey com­ing from to pro­duce the Salary Re­lief Grant and all the as­sis­tance to busi­ness­es, so at this time no we can­not de­fer it. It is un­for­tu­nate but that’s just how it is we need every sin­gle cent,” Im­bert said.

For the first quar­ter of this cal­en­der year, the coun­try record­ed a short­fall in rev­enue of $700 mil­lion, Im­bert said.

The rev­enue col­lect­ed this quar­ter from tax­es and cus­toms and ex­cise amount­ed to $3.6 bil­lion, Im­bert said.

The gov­ern­ment orig­i­nal­ly es­ti­mat­ed col­lect­ing $4.3 bil­lion.

In ad­di­tion to this, the gov­ern­ment is now al­so faced with $2 bil­lion in unan­tic­i­pat­ed ex­pen­di­ture as it as­sists cit­i­zens fi­nan­cial­ly af­fect­ed by COVID-19, as well as pay off out­stand­ing bills to help com­pa­nies ac­cess funds dur­ing this dif­fi­cult eco­nom­ic time.

This coun­try’s main busi­ness cham­bers have called on the gov­ern­ment to help them save jobs in T&T by es­tab­lish­ing a tax cred­it on salaries for com­pa­nies that do not make any prof­it over the next three months.

This was just one of five items the cham­bers deemed crit­i­cal in the im­me­di­ate term.

The cham­bers al­so called on the gov­ern­ment to de­fer the pay­ment of cor­po­ra­tion tax and Val­ue Added Tax (VAT) for the next three months.

Latin Amer­i­ca and the Caribbean will see sharp growth re­duc­tions of be­tween -1.8 per cent and -5.5 per cent of GDP in 2020 due to the im­pact of the coro­n­avirus pan­dem­ic, the IDB has es­ti­mat­ed.

The eco­nom­ic dam­age will car­ry in­to 2021 and 2022 un­less gov­ern­ments im­ple­ment well-fo­cused pro­grammes to off­set the im­pacts, ac­cord­ing to the IDB.

“Our re­gion will suf­fer an eco­nom­ic shock of his­toric pro­por­tions,” said IDB Chief Econ­o­mist Er­ic Par­ra­do.

“We need to pre­serve the core of our economies to im­prove the chances of a quick re­bound,” Par­ra­do added. “Pro­vid­ing re­lief to those more vul­ner­a­ble house­holds that have lost their sources of in­come, help­ing and giv­ing in­cen­tives to firms to re­duce liq­ui­da­tions and avoid sep­a­ra­tion of em­ploy­ees, and ex­tend­ing liq­uid­i­ty to banks so they are part of the so­lu­tion, can all work in that di­rec­tion.”

The IDB sug­gest­ed that T&T should brace for a re­ces­sion.

Two weeks ago Fi­nance Min­is­ter Colm Im­bert an­nounced that T&T had been of­fered and ap­plied for as­sis­tance from in­ter­na­tion­al mul­ti­lat­er­al in the amount of US$450 mil­lion, in­clud­ing US$100 mil­lion from the IDB.

He said the IDB will al­so al­low T&T to re­al­lo­cate unutilised re­sources from oth­er loans and this will pro­vide us with US$30 mil­lion of ad­di­tion­al wig­gle room.

“Out­lin­ing an eco­nom­ic and fis­cal re­cov­ery plan for the post-pan­dem­ic pe­ri­od will, there­fore, be an im­por­tant step go­ing for­ward,” it stat­ed.


Click HERE to Login

Want FREE access to all our content? Sign up HERE!

Tagged in:

Responses

Related articles

Sponsored

Weather

PORT OF SPAIN WEATHER

Sponsored

Trending

Man in viral video hitting woman captured
Spent shell with TTPS marking found at murder scene
Retired senior cop awarded $200,000 in damages
Soca Monarch competition cancelled
Dolsingh knighted by Queen of Denmark
$300,000 missing from Siparia Corporation
Kamla: No retreat, no surrender
President-Elect Kangaloo: I’ve received no political instructions since leaving PNM
Cocorite man killed at home
The Renaissance woman
Today's
Guardian
View
Subscribe

Publications

Numbness in your feet?

20230123072450

Your walking gear matters!

20230116101944
Sat Balkaransingh

Sat Balkaransingh

Photo by Wesley Gibbings

Sat Balkaransingh

Sat Balkaransingh

Photo by Wesley Gibbings

The Wanderers–Sat Balkaransingh in verse

20230117074645
Vic Susanna Surajdeen with her children's Book "The Adventures Of Heidi The Boxer Pup!"

Vic Susanna Surajdeen with her children's Book "The Adventures Of Heidi The Boxer Pup!"

Vic Susanna Surajdeen with her children's Book "The Adventures Of Heidi The Boxer Pup!"

Vic Susanna Surajdeen with her children's Book "The Adventures Of Heidi The Boxer Pup!"

Beloved pet dog’s death inspires children’s book

20230112202635
Created by potrace 1.15, written by Peter Selinger 2001-2017

News

Business

Sports

Life

Opinion

Tobago Today

Classifieds

Death Notices

Subscriptions

Real Estate

Categories

News
Business
Sports
Features
Opinion
Traffic Cameras
Death Notices

INFORMATION

About Us
Contact Us
Advertise With Us
Privacy Policy
Subscriptions
Terms of Services

Digital Media

The Big Board Company.
Real Estate
Classifieds

TELEVISION

CNC3 Television

RADIO

951 Remix
Sangeet 106.1 FM
Sky 99.5FM
Slam 100.5 FM
Vibe CT 105 FM
Mix 90.1 FM (Guyana)
Freedom 106.5 FM

About Us

Guardian Media is the premier provider of multimedia solutions and authoritative insight on news, politics, business, finance, sports, and current affairs. Our brand portfolio includes CNC3, Guardian, TBC Radio Network and The Big Board Company.

Contact us

Send us an e-mail here or call us at +1-(868)-225-4465

Follow us