GEISHA KOW­LESSAR-ALON­ZO

Se­nior Re­porter

geisha.kow­lessar@guardian.co.tt

The pas­sage of the Fi­nance Bill 2025 through Par­lia­ment late Fri­day has sparked de­bate among the na­tion’s lead­ing econ­o­mists, as they weigh the gov­ern­ment’s need to in­crease rev­enue against the po­ten­tial fi­nan­cial bur­den on the av­er­age cit­i­zen.

Fi­nance Min­is­ter Dav­en­dranath Tan­coo cham­pi­oned the Bill as a de­ci­sive step to­ward strength­en­ing gov­er­nance, mod­ernising out­dat­ed laws, boost­ing pub­lic safe­ty, and en­sur­ing fair­ness in Trinidad and To­ba­go’s tax sys­tem.

Econ­o­mist Dr Ronald Ramkissoon cau­tioned that while rev­enue gen­er­a­tion is im­por­tant, it must be bal­anced with ex­pen­di­ture con­trol and ef­fi­cien­cy im­prove­ments.

“T&T has been run­ning deficits for an ex­tend­ed pe­ri­od, so ad­dress­ing rev­enue is a log­i­cal start­ing point,” Ramkissoon said. “How­ev­er, poor­ly de­signed mea­sures could have un­in­tend­ed con­se­quences. Tax­a­tion op­er­ates with­in thresh­olds; if these are ex­ceed­ed, ex­pect­ed rev­enue gains may not ma­te­ri­alise. In fact, rev­enues could de­cline as eco­nom­ic ac­tiv­i­ty con­tracts. For ex­am­ple, high tax­es on rental prop­er­ties could re­strict sup­ply in the hous­ing mar­ket.”

Mean­while, econ­o­mist Dr In­dera Sage­wan said the Fi­nance Bill 2025 was de­signed to im­ple­ment rev­enue-gen­er­at­ing mea­sures pro­posed in the 2026 bud­get.

“The pro­posed ex­pen­di­ture of $59 bil­lion has to be fi­nanced, and giv­en the con­tin­ued de­cline in en­er­gy rents, the Min­is­ter had two choic­es: slash ex­pen­di­ture or raise rev­enue through new and in­creased tax­es. He chose the lat­ter,” she not­ed.

Sage­wan said the key ques­tion is whether these new tax­es were de­signed to min­imise the bur­den on the av­er­age cit­i­zen, who has faced in­creased fi­nan­cial strain over the past decade.

“Let us not for­get re­duc­tions in the gas sub­sidy and GATE cuts,” she said. “Hav­ing de­cid­ed not to cut ex­pen­di­ture, Min­is­ter Tan­coo had to de­ter­mine who to tax. Tax­es on al­co­hol and gam­ing are ef­fec­tive be­cause de­mand for these prod­ucts is in­elas­tic—peo­ple con­tin­ue buy­ing de­spite high­er prices, as con­firmed by CNC3 re­search.

“In­creased fines for il­le­gal gam­bling are al­so wel­come, ad­dress­ing the un­der­ground econ­o­my, pro­vid­ed en­force­ment mech­a­nisms are in place.”

Ad­dress­ing con­cerns that the elec­tric­i­ty sur­charge and new land­lord rent sur­charge could be passed on to con­sumers and ten­ants, Sage­wan ac­knowl­edged the risk but de­scribed it as cal­cu­lat­ed:

“The min­is­ter can on­ly hope that in­dus­try ab­sorbs part of the in­crease. As for land­lord rent, this is cur­rent­ly a sub­stan­tial tax leak­age. The mea­sure cap­tures un­paid tax­es from land­lords who are not pay­ing. With the cur­rent sur­plus of rental prop­er­ties, ten­ants can shop around if a land­lord pass­es on the tax.”

She added that any tax-dri­ven rev­enue mea­sure in­evitably im­pos­es a bur­den on tar­get­ed tax­pay­ers.

“In fair­ness to Min­is­ter Tan­coo and the new UNC gov­ern­ment, the bur­den has been shared more eq­ui­tably than in the past. He in­her­it­ed an econ­o­my with lit­tle fi­nan­cial wig­gle room and, for the most part, eased the bur­den on the av­er­age cit­i­zen.

“He re­duced the price of su­per gas and re­moved VAT on a range of ba­sic items, so the av­er­age cit­i­zen will not be worse off due to these tax mea­sures,” Sage­wan con­clud­ed.