2012/13 Budget - 44% increase in Premium gasoline

[Trini Hookah]

^ Actually $4.73, the subsidy on premium was 73c. From Min of Energy.

Just heard this on the radio as well.

[kevcam]

In a few articles about premium gasoline last week they said that the subsidy was $0.73 I was really trying to understand why the price really did not go to $4.73 then. I remember Imbert mentioning this as well.

Imbert said he will also look at the gas price and the gas subsidy very carefully and what he described as "misinformation" that is out there. "I don't think people properly understand what is going on, so I will just give you a little clue. That $5.75 is not the cost price of the gasoline. When gas is subsidised it means the Government pays the difference between the cost price and the price at the pump. But my understanding is that premium was subsidised by about 75 cents, so cost of premium is really $4.75. So what is the thinking of going to $5.75 you are profiting. So you have gone from a situation of subsidising to making a profit on the population," he said.

http://www.trinidadexpress.com/news/Fis ... 98891.html

"Based on information provided by the Energy Chamber in its presentation to UWI Management in July of this year, the subsidy on premium gas was only $0.73 per litre, while that on super gasoline was $1.83 and on diesel $2.71. Real savings are therefore likely to come only when the measure is extended to the other fuels."

http://www.trinidadexpress.com/news/_No ... 92191.html

According to Ramnarine, as of August 2012, data showed that six per cent of the subsidy was attributable to premium gasoline, 52 per cent to diesel, 41 per cent to super and one per cent to other fuels.

"In fiscal 2012 alone, the subsidy will be around $4.47 billion. You would appreciate that this money could be allocated to build hospitals, schools and roads. The subsidy in fiscal 2012 is actually twice the budgetary allocation to Tobago in fiscal 2013," said Ramnarine.

http://www.trinidadexpress.com/news/SWI ... 92201.html

So about 6% of the $4.47 billion subsidy was attributed to premium ($0.73 per litre) That is about 268 million.

An extra $1.02 was added to make the premium price $5.75. That extra dollar would make up about 8% of the $4.47 billion subsidy, that is about 358 million profit on premium gas alone.

So it look like the figure wrt premium has gone from a deficit of 268 million to a profit of 358 million, for a total of 626 million.

[pioneer]

brb sheep baa'ing

[Rainman]

AH WANT JOSTISSS!!!!!!!!!!!!!!!!!!!!!!!

brb assrape from gubment

[rfari]

Ways...that I didn't pick up on.

[1UZFE]

Dont mean to be the Devil's Advocate but isnt it a fact if Diesel and Super prices increases then the price of transportation and by extension the price of food would increase. So wouldn't it make sense to tax d "6% of the population" for the entire / majority subsidy? Thus keeping the prices of food and transport down.
Just saying...!!!

[pioneer]

Food prices already relatively cheap here.

If the government wanna say we get gas cheap, then I can safely say our bread is cheap compared to the US and other countries.

Something has to give, raise diesel and super also, there must be equity.

[Crackpot]

I wonder if good ole Jeremy Clarkson lived here and the gubment tried to force the
population to convert to a ridiculous sissified alternative petrol what would he said?

We claim to be members of a site that loves cars and all that but what measures have WE done collectively to object? Where is the online petition that our 20,000 plus members could participate in?

Maybe it's because it has not affected the majority of us just like Crime, but it doesn't take Mother Pena to see where this is going. And I can't wait for the chaos. Because when they do it everything will come down like a house of cards.

Something is not right in who-ville Even TV-6 more gangsta...their ppl meter was: Have we ACCEPTED the price increase

[megadoc1]

remove all these subsidies!

[rfari]

So... Wha about cal? Dem gwan lorse dey fuel subsidy too?

[EFFECTIC DESIGNS]

They already raising taxi fares on my side.

Men with them 280c diesel punisher crying over this increase. One man said "FUEL" gone up and he hadda raise the fee. One passenger claims he got blood poisoning from one of them 280c also.

[AllTrac]

EFFECTIC DESIGNS, you real weird dred....

[crazybalhead]

Going to fillup for the third time since increase. BRB buying prep H.

[SR]

doh forget to collect yuh "please try again" card

[nervewrecker]

Something is not right in who-ville Even TV-6 more gangsta...their ppl meter was: Have we ACCEPTED the price increase

They feeling out the population. Robb allyuh mc and see how allyuh take it so they will know if to go ahead with the complete ass rape.
So far so good, everyone flat on their belly adjusted and accepted it straight up the rear end.

[toyolink]

As a matter of principle I cannot support any increases.
That having been said,I appreciate that real circumstances at this time make increases a necessary evil we must contend with.
I however will advocate that upward adjustments in costs must be equitable and it's the gov't responsibility to avoid inequity in relative burden any one economic class must bear.
The bad news this year is not so much the increases implemented,but the fact that for the next few years things are going to get worse.
Immediate implementation of strategies by everyone to cope with what is on the horizon is imperative.This may mean taking some tough decisions (eg homecook food instead of fastfood etc.).
We either do what is required voluntarily or circumstances will overtake us.
.....PLEASE NOTE THIS ALL HAPPENED BEFORE!

[kevcam]

So Imbert brought up some good points in the debate

http://www.trinidadexpress.com/news/Gov ... 19521.html

So Howai is saying below HE WAS TOLD the price without the subsidy would be $6.21 (i.e the subsidy for premium was $2.21) So at $5.75 there is still a subsidy of $0.46 according to what HE WAS TOLD.

Now remember yesterday I quoted this part from the article

http://www.trinidadexpress.com/news/_No ... 92191.html

Audit and accounting firm PricewaterhouseCoopers said, in its budget review yesterday, premium gas is the least subsidised of gases.

"Based on information provided by the Energy Chamber in its presentation to UWI Management in July of this year, the subsidy on premium gas was only $0.73 per litre, while that on super gasoline was $1.83 and on diesel $2.71. Real savings are therefore likely to come only when the measure is extended to the other fuels."

So how come the subsidy on premium gone from $0.73 per litre to $2.21 per litre? That would've meant that premium was being subsidised more than super ($1.83) and just 50 cents short of the diesel subsidy. WTF really going on here?

This was Howai's response to it all.

Finance Minister Larry Howai says he is not aware that the Government broke any law when it increased the price of premium gasoline in the 2012/2013 budget.

This was his response in an interview with TV6 News which aired last night about a claim made by Opposition MP Colm Imbert that the hike in the price of a litre of premium gasoline from $4 to $5.75 was in breach of the Petroleum Levy and Subsidy Act.

"This is the first I'm hearing of it," Howai said.

Imbert said the Act, passed during in 1973, stipulates that all oil companies in Trinidad and Tobago pay a levy to help reduce the local retail price of petroleum products, including super and premium gasoline and diesel.

Howai said Finance Ministry officials looked at the whole issue of the reduction of the subsidy in premium gasoline.

[b]"Without the subsidy, yes, I'm told that the price would be ($)6.21 we are actually at ($)5.75 so there is still an element of subsidy inside of there so the whole issue of contravening the law doesn't really arise as far as we could see," Howai said.[/b]

He however said he has asked officials at the Finance Ministry to take a second look "to see whether there is any substance" to Imbert's claim.

"But, as far as we're aware, at the moment certainly we are not in contravention in any law that is basically our position at this point in time," Howai said.

Imbert claimed the oil petroleum levy now accounted for $1 billion of the $4.7 billion fuel subsidy.

In response to a question from TV6 News, Howai said he was aware of the Act and added that the levy placed on the multinational energy giants that extracted oil from the land and marine reserves in Trinidad and Tobago was now "in the region of about $700 million."

"And so, for example, when we quoted, we say the subsidy is $4.4 billion and what we do is we deduct the $700 million. So you may sometimes hear numbers quoted that the subsidy is $3.7 billion and sometimes you hear is ($)4.4 (billion) and, I know, sometimes the public gets confused and they don't know if it's 3 billion, 3.7 or 4.4," Howai said.

He explained that "some people" may quote the net subsidy figure (minus the petroleum levy) while others may quote the gross subsidy figure (with the petroleum levy).

"In determining what the overall requirement is for this year we would have taken, done our own projections, of where the petroleum subsidy comes in to determine what exactly would be the requirement for this year," Howai said.

http://www.trinidadexpress.com/news/___ ... 19511.html

[Polydor]

someone is going to get in serious trouble very soon.....stay tuned.

:::Maintaining
balance
while
striving
for gold!
http://www.pwc.com/tt
2013 Budget Memorandum
2 2013 Budget Memorandum
To Our Clients
and Friends
Shortly after his appointment to ‘the
hot seat’ the Honourable Minister
of Finance, Senator Larry Howai,
sounded the warning that this would
be an austerity Budget. The clear
signal he gave was that while he
intended to ensure that the various
Ministries receive the financing
to fund what were considered to
be the priority projects, he would
be seeking to control the deficit,
possibly through new tax measures
and enhanced collection efforts.
However, this initial sentiment has
not been evident and the tune, as
we Trinis say, seemed to change
on Saturday when the Honourable
Prime Minister, Mrs Kamla Persad
Bissessar promised the removal of
VAT on all but luxury “food” items
such as caviar and champagne. There
seemed to be great deal of jubilation
at the news, but until we understand
the true import of that statement it
would be prudent to contain that
excitement.
The Minister’s Budget was much
more upbeat than we had been
led to expect. One can describe it
as cautiously optimistic regarding
the state of the economy and the
prognosis for the future. While some
measures were announced such as
the gradual reduction/removal of
the gas subsidy and tax incentives for
the targeted sectors of the economy
such as construction and the creative
sector, other measures were deferred
pending what the Minister promises
to be wide spread consultation. He
expects that consultation to end in
an overhaul of the tax system and
a re-introduction of property tax,
in a more palatable form than was
previously proposed. Only time will
tell if it will be sufficiently palatable
for the populace .
While we welcome the move away
from austerity to stimulus, we can
only hope that as we continue to
celebrate our 50th anniversary as
an independent nation that we are
mature enough to make the difficult
decisions and introduce any austerity
measures that may be needed before
our situation becomes too dire
and we are again forced down an
unwelcomed path by factors outside
of our control.
Like the athletes who made us so
proud at this year’s Olympic Games,
we need to put in the hard work
and make sacrifices now so that we
have a basis for celebrating later, i.e.
a sustainable, healthy, productive
country of which we can all be
proud.
We have sought in this document
to provide some background to and
explanations of, the tax and other
measures as we understand them,
in an attempt to provide you with
a clearer picture of the proposed
measures and their implications.
As always, our team is willing and
able to discuss any of these issues
with you and we will be happy to
support you in maximising such
opportunities as may be available as
a result of the proposed amendments
to the tax legislation.
Allyson West
Director
2013 Budget Memorandum 3
Contents
Budget Overview 2012-2013.............................................3
Summary of Fiscal Measures.............................................6
Commentary on Fiscal Measures/Other Measures............9
Energy Measures.............................................................14
VAT and the Food Import Bill...........................................16
The Budget and Other Measures.....................................16
Whither the Fuel Subsidy?................................................19
Property Tax.....................................................................21
Tax Administration Reform..............................................24
Tourism in Trinidad and Tobago.......................................26
FATCA - Who, what, when and why..................................29
Appendices......................................................................30
4 2013 Budget Memorandum
In his maiden national budget
presentation and the third of
the current administration, the
Honourable Minister of Finance
seems to have pressed the restart
button and changed the focus of
his administration. The previously
marketed five growth poles
were reduced to mere passing
mention and instead under the
theme “Stimulating Growth,
Generating Prosperity” the focus
is now on “public policy agenda
for transforming this country with
solid platforms for good quality
job creation and ensuring that the
wealth so created is distributed to
the national citizenry in a fair and
equitable manner.”
The Minister has however not shifted
the basis of his revenue projections
which consistent with 2011/12 are
estimated using USD75 per barrel of
crude and USD2.75 per million cubic
feet (mcf) of gas. These estimated
prices appear to be reasonable
compared to projected 2012 and
2013 West Texas Intermediate (WTI)
prices of USD95.66 and USD92.63
respectively.
In the budget speech for fiscal 2012
economic growth was projected at
1.7% and is expected to be “in the
vicinity of 1.2%.” However for fiscal
2013 an average annual growth
rate of 2.5% is anticipated, a 100%
increase.
Inflation which was pegged in 2012
at 7% is estimated at a decreased
rate of 5.6% for 2012/13 in spite
of the partial removal of the fuel
subsidy on premium gasoline which
is likely to have an impact.
It has become the norm that a
detailed review of the performance
of the economy is no longer part of
the budget presentation .Instead
there is limited information
provided in a review of the domestic
economic conditions. This leaves
the citizenry to guess how the
country performed. For example,
information on the amounts
transferred to the Heritage and
Stabilisation Fund was not provided
but rather the balance of the fund
as at August 2012. In 2012/13 a
deficit of $7.669bn (4.6% of GDP)
is expected with total revenue
estimated at $50.736bn and
expenditure of $58.405bn.
The Minister has identified Land and
Building Tax, Fuel Subsidies and Tax
Collection as the pillars on which he
will be able to arrive at a balanced
budget in the medium term.
The details however were notably
absent regarding the reintroduction
of the Land and Building Tax regime
with the Minister merely promising
that it will be fairer and more
equitable than what was previously
proposed. Until this new regime
is introduced, the waiver of these
taxes continues to be lost revenue to
the government. In the meantime
companies continue to face the issue
of determining whether to accrue
for such taxes and if so, how much.
However, the Minister should
be given some credit for at least
indicating the broad intention in
relation to the property tax since
for too long, we have all been left to
Budget Overview
2012-2013
2013 Budget Memorandum 5
wonder.
The Minister has announced his
intention to begin a phased removal
of the fuel subsidy. It was perhaps
prudent for it to be limited to
premium gasoline at the outset as
this is potentially the area in which
its removal is likely to have the
least negative impact on the wider
populace.
Comprehensive review of the
entire tax system is proposed and
it is hoped that this review will be
structured and that there will be
wide consultation so that many of
the anomalies caused by previous
piecemeal amendments may be
resolved.
The Honourable Minister has also
stated very decisively that 2012/13
will see the close of the CLICO
and Hindu Credit Union (HCU)
matters. The CLICO investment Fund
(CIF) will finally be launched on 1
November, 2012, followed by trading
on the T&T Stock Exchange of units
exchanged for 11-20 year bonds.
The tax exemption of the dividends
/ distributions paid to resident
individuals/companies should be
an incentive to the potential unit
holders. Exactly how the Minister
intends to bring the HCU matter to
conclusion in fiscal 2012/13 was
not disclosed but it seems ambitious
given that only approximately 33%
of payments to beneficiaries with
balances under $75,000 have been
made to date and those over $75,000
will commence on 1 November,
2012.
The diversification of the T&T
economy away from oil and gas has
been an elusive target and this time
around it is “the third area of growth
focus” One initiative mentioned
in this regard is improving the
ease of doing business in T&T and
specifically speeding up the time
to establish a new company in
T&T. This is indeed welcomed and
should be streamlined with the
review of the tax system and the
introduction of electronic payments
to government agencies which in the
very early stages should include the
BIR as this is a constant enquiry by
foreign companies considering doing
business in T&T.
The establishment of the Financial
Institution Support Services Industry
seems to be very positive in its
employment creation potential as
we certainly have an increasing
number of persons pursuing tertiary
education and the skilled workers to
supply the need.
The conversion of gasoline vehicles
to compressed natural gas (CNG)
has not been as successful as the
government would have liked in
spite of the tax incentives offered;
one of the reasons being the number
of filling stations. Perhaps the
government can take the initiative
in this and start by converting all
government vehicles to CNG. The
five year conversion period seems
ambitious given the number of years
that this initiative has been on the
cards. However, the very real threat
of subsidy reduction may achieve
where the tax incentives failed.
Comprehensive review of the entire tax system is proposed and
it is hoped that this review will be structured and that there will
be wide consultation so that many of the anomalies caused by
previous piecemeal amendments may be resolved.
6 2013 Budget Memorandum
The local fashion industry has
been identified as an area for
diversification and no doubt the
introduction of the tax deduction
of up to $3M for the corporate
sponsorship of nationals in this
industry and relief from Customs
Duty and VAT would be welcomed.
Declining oil production continues
to be an issue and the Minister is
introducing additional measures
aimed at increasing production and
the competitiveness of the T&T tax
regime.
Increases in the benefits paid under
the NIS system and the Disability
assistance grants will be welcomed
by recipients, through this will mean
an increase in contributions. We
note that the Minister has mentioned
annual increases in the maximum
insurable earnings beginning 2013 as
well as increases in contributions.
The initiatives to stimulate the
growth in the economy are many and
seem to rely very much on the Public-
Private Partnership (PPP) model.
The question however is whether
sufficient confidence in the economy
exists that would bring the level of
investment and buy in on which the
Minister seems to be relying.
Overall, there was a surprising
optimism to the Minister’s
presentation that did not reflect the
gloomy outlook that many were
expecting. However, in the absence
of details of the actual performance
and the measures that are yet to
come, it is difficult to assess whether
that optimism is warranted.
The Honourable Minister has also stated very decisively that
2012/13 will see the close of the CLICO and Hindu Credit Union
(HCU) matters. The CLICO investment Fund (CIF) will finally
be launched on 1 November, 2012,
2013 Budget Memorandum 7
Personal Income Tax
• Income Tax of 25% retained;
• Personal Allowance of $60,000
per taxpayer retained;
• Tertiary allowance for children
attending university abroad of
$60,000 retained;
• Deduction for contribution to
approved pension fund/annuity
plans retained ($30,000 per
year inclusive of 70% of NIS
contribution);
• Non-taxable special allowance
($1,000) paid to members of the
protective service to be extended
to Special Reserve Police officers
from 2 October 2012;
• Dividends and other
distributions paid to resident
individuals by the Colonial Life
Insurance Company Limited
(CLICO) Investment Fund will be
exempt from Income Tax.
Corporation Tax
• Corporation tax rates of 25 %
and 35 % retained;
• Dividends and other distributions
paid to resident companies by
the CLICO Investment Fund will
be exempt from Corporation Tax;
• Tax exemption for profits from
the initial sale of land developed
after 1 October 2012 for
residential housing where the
eventual sale is completed prior
to 31 December 2015;
• Tax holiday on gains from the
initial sale of newly constructed
houses of a value not exceeding
$1.5m where construction
commences after 1 October
2012. The tax holiday will apply
for a period of three years from
the date that the legislation is
enacted;
• Corporation tax holiday of
five years on profits earned in
the construction and rental of
commercial buildings (including
multi-storey car parks) where
that property is constructed
within five years from 1 October
2012;
• Tax deduction of 150 % of
expenditure (up to a maximum
$3m per annum) for corporate
sponsorship of:
• audio, visual or video
productions intended for
local education or local
entertainment;
• nationals in the local fashion
industry;
• Tax deduction of 150 % of
expenditure (up to a maximum
$3m per annum) to be claimed
by local production companies in
respect of their productions;
• Tax deduction in respect of
contribution to sporting activities
increased from $2m to $3m from
Income Year 2013;
• Employment allowance uplift of
150 % of salaries for companies
which employ Community-
Based Environmental Protection
& Enhancement Programme
(CEPEP) and Unemployment
Relief Programme (URP)
employees.
Summary of
Fiscal Measures
8 2013 Budget Memorandum
Business Levy
• Business Levy threshold to be
increased from $200,000 to $360,000
with effect from 1 January 2013;
• Business Levy of 0.2 % on gross
income retained.
Withholding Tax (WHT)
• Standard rates of WHT of 15 %
on payments and 10% and 5% on
distributions retained.
Petroleum Tax
• Petroleum Tax rate of 50 % retained.
Unemployment Levy
• Unemployment Levy rate of five %
retained for Petroleum Operations.
Supplemental Petroleum Tax
(SPT)
• Harmonisation of SPT rates (pre-1988
and post-1988) for marine areas as
detailed below:-
Price $US
(%)
Marine “A”
(%)
Marine “B”
(%)
Land and
Deepwater “C”
(%)
0 – 50.00 0 0 0
50.01 – 90.00 42 33 18
90.01 – 200.00 Base SPT Rate +
0.2% (P-90.00)
Base SPT Rate +
0.2% (P-90.00)
Base SPT Rate +
0.2% (P-90.00)
200.01 and over 64 55 40
Pre-Budget SPT Rates
Price ($US)
(%)
Marine
(%)
Approved New
Field
(%)
Land and
Deepwater “C”
(%)
0 – 50.00 0 0 0
50.01 – 90.00 33 25 18
90.01 – 200.00 Base SPT Rate +
0.2% (P-90.00)
Base SPT Rate +
0.2% (P-90.00)
Base SPT Rate +
0.2% (P-90.00)
Above 200.01 55 55 40
Revised rates
2013 Budget Memorandum 9
• Introduction of an uplift of 40 % for
a period of five years on exploration
costs (excluding exploration dry
holes) incurred in approved projects.
Customs/Import Duties
• Waiver of import duties for persons
engaged in the film industry on the
importation of equipment and filmspecific
goods;
• Exemption from custom duties on the
importation of CCTV cameras and
digital video recording equipment
for homeowners, community and
business security;
• 30 % import duty on the importation
of used tyres.
Value Added Tax (VAT)
• Zero-rating of VAT on machinery and
equipment for persons in the creative
industry;
• Exemption from VAT on the purchase
of CCTV cameras and digital video
recording equipment for homeowners,
community and business security;
• VAT is to be removed from all food
items (except luxury items and
alcoholic beverages).
Stamp Duty
CLICO Investment Fund
• Waiver of stamp duty on the
transfer of shares held in Republic
Bank Limited from CLICO to the
Government of Trinidad and Tobago;
• Waiver of stamp duty on the transfer
of shares held in Republic Bank
Limited from the Government of
Trinidad and Tobago to the CLICO
Investment Fund (CIF);
• Waiver of stamp duty on the transfer
of units in CIF by the Government of
Trinidad and Tobago to bondholders
after the expiration of the initial offer
period.
Premium Gasoline
• Premium Gasoline to be increased in
price from $4.00 per litre to $5.75 per
litre with effect from 2 October 2012.
National Insurance
• The contribution rate will be
increased from 11.4 % to 11.7
% in 2013 and 12.0 % in 2014;
resulting in an increase of 0.1 % in
contributions for employees and 0.2
% for employers in 2013 and similar
increases in 2014.
• The Maximum Insurable Earnings
will be increased initially from $8,300
in 2012 to $10,000 in 2013 and
thereafter annually up to 2020 at
which time the maximum insurable
earnings will be $22,000.
Gaming Tax
• Taxes on gaming tables and other
devices used by Private Members’
Clubs to be increased from 1 October
2012.
Other Fiscal Measures
• With effect from 1 November 2012
the first issue of a driver’s permit
will remain valid for five years. Upon
renewal, the holder will have the
option to renew for five years at the
fee of $500 or ten years at the fee of
$1,000.
10 2013 Budget Memorandum
Commentary on
Fiscal Measures/
Other Measures
In accordance with the Theme
of the Budget for 2012/13
“Stimulating Growth, generating
prosperity” the Honorable Minister
of Finance Minister has identified
the following measures:
Growth Trade and
Investment
Financial Institutions Services
Industry
• Incentives to be announced
Commentary
The Honourable Minister
announced that the Government
as part of the launching of the
International Financial Centre
is proposing to introduce the
appropriate legislation and tax
incentive in due course. In the
absence of any details as to what
form the proposed incentives will
take it is difficult to comment
on what potential impact if any
these incentives will have in
the attraction of foreign direct
investments as well as local
investment.
The idea of the IFC has been
promoted for several years and
several suggestions were offered
as to what form the incentives
should take including the removal
of withholding tax and the
management charge restriction.
Nevertheless, the institution of any
measure to incentivise the financial
services sector should only be
undertaken after due consideration
of all the relevant factors relating
to this sector. A holistic review
should therefore be undertaken
and experience should be drawn
from similar initiatives in other
jurisdictions.
CLICO Investment Fund
• There will be a waiver of all
applicable stamp duty on the
following transfers:
o Republic Bank Limited
Shares (RrBL) from CLICO
to the GOTT:
o Transfer of these shares
to the CLICO Investment
Fund (CIF)
o CIF units by the
Government to bond
holders after the initial
offer period has expired
Commentary
The waiver of stamp duty on
transfer of RBL shares to the
GORTT and transfer of these
shares to CIF can be seen more as
an administrative move where the
GORTT is prepared to forego the
revenue from this transaction in an
effort to expedite the completion of
this issue. The true implication of
this initiative is not apparent since
economically the payer of the tax
and the recipient is the same.
• The legislation will be
amended to exempt:
o Any dividends and
distributions paid to
resident individual and
companies by the CIF.
o Profits accruing to the
Trust under the CIF
2013 Budget Memorandum 11
Commentary
The move by Government to exempt
dividend and distributions paid to
resident individuals and companies is in
keeping with the scheme of the Income
and Corporation Tax Legislation since this
measure already exists in the legislation.
The exemption of the profits accruing
to the Trust is also consistent with
the GORTT policy to encourage local
investment. There may however be some
inconsistency/contradiction in that in
the current scheme of the legislation and
based on the position adopted by the BIR
it is unclear as to how the investment by
a Savings Plan to such a Fund will be
treated since the legislation appears to tax
income derived by a Savings Plan from
investment. While this state of affairs
may not have been contemplated by
the Minister it should be borne in mind
so that the appropriate enactment will
address this apparent inconsistency.
Creative Industry Incentives
The following incentives will be
introduced effective January 1, 2013 with
respect to sponsors and producers in the
creative industry as follows:
• 150% tax deduction to a maximum of
TT$3m for the following:
o Corporate sponsorship of
nationals in the local fashion
industry
o Corporate sponsorship of audio,
visual or video production for the
purpose of local education or local
entertainment
o Local production companies in
respect of their own production
It is intended that during fiscal 2013 there
will be consultation to:
o reduce the relevant customs
duties for persons in the creative
industries under the currnet
system
o Implement a regime to allow
duty free importation into T&T of
equipment and film-specific goods
o Determine listing of goods that
would be zero-rated of machinery
and equipment for persons in the
creative industries
Commentary
The granting of this deduction in respect
of contributions made to audio visual and
local production is not new but merely
increases the cap allowed.
The introduction of this allowance in
respect of contributions made to the local
fashion industry, at a time when there is
an urgent need to diversify the economy
and focus on sectors outside the volatile
energy industry will be embraced by
many. It has a double barrel effect in that
it encourages local entrepreneurship
as well as creates an environment for
business to support this industry while at
the same time enjoying the accompanying
tax benefits. There is however need for
clarity in defining what the local fashion
industry entails and how far is the GORTT
prepared to go to support this industry.
For instance it may be counter intuitive to
seek to promote this measure without at
12 2013 Budget Memorandum
the same time introducing some measures
with respect to local contents.
Crime and National Security
• Purchase of CCTV cameras and digital
video recording equipment will now
be exempt from customs duties and
VAT
Commentary
With the growing concern over the
increase in crime rate over the last few
years this measure will go a long way
in providing relief not only to business
owners but also residential owners. The
Honourable Minister noted that the
purchase will be exempt from customs
and excise duties and VAT. However, in
respect of VAT it may be more beneficial
to the taxpayer where a zero rate applies
rather than the exemption since this will
allow those persons to be able to claim
this expense as input VAT in accounting
for VAT.
Corporate Social Responsibility
• Increase of deduction for
contributions to sporting activities
from TT$2mil to TT$3mil effective
2013
Commentary
There is a need to continue our support
and development of athletes in light
of T&T’s recent achievements at the
Olympics. As such the increase in the
allowance for the sponsorship of sporting
activities will provide an incentive to the
corporate sector to continue its support.
As in the case of donations to charitable
organisations consideration should be
given also to extend this incentive to
individuals which will provide further
incentive for more persons to support this
initiative.
National Insurance System
• NIS - Modification of the present
contribution system over the next two
(2) years.
• NIS – Increase in the maximum
insurable earnings from 2013 to 2020
• NIS – Inclusion of self employed
under the NIS system
Commentary
This measure essentially increases the
benefits and contributions applicable
under the scheme. It represents a
continuation of the Government’s
long term plan to revamp the social
contributions system to make it more
viable and less burdensome to the State.
The benefits of this measure are likely to
be felt by the lower income earner who
will not be required to pay at the highest
rate.
The inclusion of the self employed into the
system was also announced previously by
the Government and as such it is to still
to be seen how the Government proposes
to implement and monitor this proposed
measure.
Housing and Land Development
Housing Development
• Tax exemption of gains or profits from
the initial sale of newly constructed
houses by a trader in houses where
the construction cost does not exceed
1.5m for activities commenced after
October 1, 2012. This incentive is
2013 Budget Memorandum 13
operational for a period of three
(3) year from date of passage of
legislation.
Land Development
• Gains and profits from the initial
sale of land developed for residential
housing where development
commenced after October 1 2012 and
sale of land is prior to Dec 31, 2015.
Commentary
Though there continue to be an increase
in the demand for housing, fewer
persons are finding it increasingly
difficult to access housing owing partly
to the slowdown in the economy and the
inflated prices . Government’s quest to
provide incentives to encourage housing
development may however not yield
the intended benefits in the absence
of a comprehensive legislative regime
regulating the housing development. In
fact this may have the undesired effect of
fostering further exploitation and inequity
where the affluent developers will readily
capitalise on the tax incentives and at
the same time are not compelled to lower
the costs (selling price) for housing. This
measure should therefore be implemented
simultaneously with other legislation
regulating the housing market.
This also holds true for land development.
Energy Sector
Harmonising SPT rates
• Removal of distinction in SPT rates
between pre and post 1988 for marine
areas
• One rate of 33% now applicable for
the prices ranging between US$50/
bbl - US$90./bbl
• For prices over US$90/bbl the current
formula will continue to be applied
• SPT provisions for land and
deepwater will continue unchanged.
Introduction of new SPT rates
• A special SPT rate of 25% will be introduced
for new field development at
prices above US$50 and up to US$90/
bbl
• No change to applicable rates for
prices >US$ 90 and US$200.
Uplift on Exploration Cost
• The introduction of an uplift of 40%
for a five (5) year period on exploration
costs (excluding exploration dry
holes) on approved projects in deeper
horizons.
Commentary
The Government continues to look at creative
ways to stimulate the energy sector.
The move to harmonise the SPT rates is
one such initiative and as the Honourable
Minister noted that the measure is intended
to inter alia enhance the economics
of field development of small pools
and increase the competitiveness of the
country’s fiscal regime.
The 40% uplift is also a positive move to
increase investment by attracting more
investors to T&T.
Business Levy Threshold
Business Levy threshold has been
increased from $200,000 to $360,000
with effect from January 1, 2013
14 2013 Budget Memorandum
Commentary
The increase of the VAT threshold
to $360,000 effective January 1,
2013 has led many commentators
to predict that the Business Levy
threshold will also be increased. This
measure is therefore not a surprise.
It may however lead to the argument
that the GORTT is contracting rather
than expanding the tax net and
allows many small businesses to fall
outside this net.
Employment Allowance
Uplift of 150% of wages and salaries
paid to former CEPEP and URP employees
employed by private sector
companies.
Commentary
The basis of this measure is unclear
since generally the rationale for
this measure is to encourage full
employment. According to the
Honourable Minister the current
unemployment rate is 4.9% which
in economic terms reflects a level of
full employment. In 2006 when the
Government removed this allowance
this move was not surprising since
during that era like now the economy
boasted full employment.
2013 Budget Memorandum 15
It may have been a very subtle
message by the Honourable Minister
in presenting the national budget
to list the energy sector as the ninth
major area of focus even though he
did not indicate that his list was in
any particular order of priority. Yet
the fact remains, as he concluded,
that this sector is the anchor for our
growth and development.
The energy sector represents 45.3 %
of GDP for Trinidad and Tobago, 82.3
% of total exports and over 50% of
Government revenue. In fiscal year
2010/2011 taxation revenues from
the oil and gas sector accounted for
37% of total Government taxation.
This sector also contributed
approximately 54% of the total
non tax revenue received by the
Government. This includes monies
from royalties and Government
shares from Production Sharing
Contract profits. In addition, on the
downstream side, the petrochemical
sector and liquid natural gas
production, have contributed a very
significant percentage of the $8.8 bn
collected in Corporation Tax.
The oil and gas sector has been
buoyed by high oil prices but
the uncomfortable reality is that
oil production and exports have
been declining and this is likely to
continue unless there is significant
investment in new exploration. Oil
production declined from 148,000
barrels per day in 2006 to 102,316
bpd in 2010 and 91,976 bpd in 2011.
See Chart 1.
A key to reversing the decline is a
competitive fiscal regime. However,
the general consensus seems to be
that our regime is not sufficiently
competitive and requires the
introduction of additional capital
and investment allowances to
encourage exploration, especially for
deep sea exploration. While there
has not been the general overhaul of
this regime as had been hoped, a few
amendments have been introduced
over the past two years which seem
to have had some impact.
Fiscal incentives for land and marine
were introduced in 2010 and resulted
in a return to drilling activity in 2011.
These additional incentives together
with a reduced rate of tax for the
deepwater blocks appear to have
contributed to a relatively successful
2012 bid round although we must
await the actual awards in November
to truly determine the level of
success. The Minister of Finance also
indicated in his budget presentation
that 19 exploration wells will be
drilled in 2013.
While the expected upstream
investment in 2012 is expected to be
over USD2.5 m, the country must
devise a plan to integrate its energy
value chain, improve competencies,
export expertise to international
markets and ensure the country is
seen as a preferred energy sector
investment destination by improving
doing business here.
The outlook for the gas sector is
more positive as T&T will continue
to be an important regional
exporter of Liquefied Natural Gas
(LNG). Gas production continues
to rise and the July 2012 Ryder
Scott Gas Audit Report indicated
buoyant gas reserves. This provides
Energy
Measures
16 2013 Budget Memorandum
some assurance of supplies for
downstream projects which need to
be brought on stream.
On the gas side of the sector, the
challenge will be finding markets
for this gas. The gas export sector
was developed with a US focus but
the shale gas boom in that county
has dramatically reduced the need
for the import of LNG by the US.
The additional challenge in this
regard will be the identification of
new markets in Europe and Asia.
However T&T’s distance from the
latter in particular will make it
difficult to compete with projects in
Australia and Malaysia.
Chart 1
Oil Production schedule bbl/day
Source: Ministry of Energy & Energy Affairs
2013 Budget Memorandum 17
GORTT has announced its intention
to zero rate all foods items with
the exception of luxury items and
alcoholic beverages. This is intended
to be a temporary measure aimed
at addressing inflation, a significant
portion of which can be attributed to
food prices.
The Honourable Minister indicated
that the medium to long term
objective is to address the food prices
by reducing the food import bill
(sources indicate that the country
currently imports at least 80% of its
food). GORTT is seeking a reduction
of 50% or just over $2bn per year by
2015. It is expected that when the
country has achieved greater selfsufficiency
and local food security
(and thus has better isolated itself
from potential global price shocks)
VAT will be re-introduced on food
items.
In the interim, the Government
intends to implement the following
measures to expand the domestic
food production:-
1. Establish a Commodity
Stabilisation Fund under
the National Agriculture
and Marketing Development
Corporation (NAMDEVCO)
aimed at stabilising the supply
and price of targeted products
and strengthening the agroprocessing
sector;
2. Distribute standard leases to
farmers:-
a. 4,111 acres of Caroni lands
and 100 acres at Tucker Valley
conditional on the start of
cultivation;
b. Two acre-size plots to ex-
Caroni workers (an estimate
of 5,000 leases within the next
two years) with the assistance
of private attorneys to expedite
the process:
3. Establish a Food Security
facility with the Government of
Guyana aimed at funding the
establishment of large farms in
Guyana.
The Minister highlighted that the
existing legislation already provides
for several incentives to persons
in the agricultural sector which he
encouraged persons to utilise.
In addition to the measures listed in
the budget speech, other initiatives
also aimed at establishing food
security were listed in the National
Food Production Action Plan 2012-
2015 unveiled by the Honorable
Vasant Bharat on March 12, 2012. It
included a focus on the production of
the following targeted commodities:-
VAT and the Food
Import Bill
The Budget
and Other Measures
18 2013 Budget Memorandum
The main pillars of the plan include a
focus on:-
• The Land Distribution Program;
• Research & Development and
Innovation;
• Training and the Agricultural
Labour Program;
• Development and
commercialisation of value
added products;
• Marketing
The Ministry of Food Production
was allotted an estimated budget
of $623m or 1.1% of the recurrent
expenditure (a decrease of 0.5%
over the revised 2012 estimates) to
accomplish its mandate.
Commentary
The announcement of the removal
of VAT on food items has generated
a plethora of comments over the
last few days. The main issues for
consideration as we see them are:-
• How many additional food items
will actually be zero rated given
that most basic and several other
categories of food were already
zero-rated (see Appendix iv)
2013 Budget Memorandum 19
• Will the measure trickle down
to the consumers through a
reduction in food prices and is
there a system for monitoring
and reporting on the overall
impact on consumers?
• What will this measure cost the
Government?
• How is this loss going to be
compensated?
• What assessment can be made in
terms of the effectiveness of the
current VAT system?
According to the “Details of
Revenue for the Financial Year
2013,” VAT will constitute 15.6% of
the total estimated revenue of the
Government in 2013 (versus 16.3%
as per the revised 2012 estimates).
The VAT earnings are estimated to
amount to $6.7bn in 2013 versus
$6.5bn according to the 2012 revised
estimates, an increase of $0.2bn in
VAT revenue. Therefore, despite the
zero-rating of the VAT on non-luxury
food items, the statistics circulated
by the Government suggests that it
does not anticipate any decrease in
VAT revenue on a dollar value basis.
However, we do not have an estimate
of the tax that will be foregone
through the introduction of this
measure.
Ministry of Finance data put together
in and around 2005 had identified
abnormalities in the efficiency of our
VAT system which were attributed
in part to an ever increasing number
of zero-rated supplies and leakages
in the system due to a lack of
compliance.
The continuing trend is expected to
exacerbate the issue by:-
• Possibly creating definitional
problems and thus the possible
misapplication of tax rates;
• Encouraging other stakeholders
to lobby for the inclusion of
additional items in the zerorated
schedule;
• Creating compliance and
accounting complications;
• Resulting in the decrease of
potential tax revenue.
A reintroduction of the VAT in the
future will create its own challenges.
Therefore, despite the
zero-rating of the VAT on
non-luxury food items, the
statistics circulated by the
Government suggests that
it does not anticipate any
decrease in VAT revenue
on a dollar value basis.
However, we do not have
an estimate of the tax that
will be foregone through
the introduction of this
measure.
2013 Budget Memorandum 20
One of the most challenging issues
facing the country is what should be
done about the fuel subsidy which
continues to be a significant drain
on the Treasury. It is of particular
concern for the Minister of Finance
as he seeks to reduce the deficit and
revitalise the economy.
The issues contributing to the
increase in the size of the subsidy
are:-
• The level of the subsidy is
pegged to oil prices and at prices
approximating US$100 per
barrel the subsidy is in the range
of $3.4bn annually. See Figure 1
• The increase in domestic sales
of gasoline and diesel as a result
of the number of vehicles on
our roads, and the increasing
number of high-end vehicles that
consume diesel which is more
heavily subsidised than premium
gasoline. See Figure 2.
In pre-budget commentary, the new
Minister indicated that austerity
measures are the prescription to fix
our economic challenges and it was
speculated widely that adjustment
to the fuel subsidy may have been
among the measures prescribed. In
the Budget presentation the Minister
announced the partial removal of
the subsidy only in respect of the
price of premium gasoline which
will increase from $4.00 per litre to
$5.75 per litre. The Minister seems
to have taken the relatively safe road
since premium gasoline is the least
subsidised and the price increase
will not have the same far reaching
implications as an increase in the
price of diesel. This decision was
presumably based on the notion that
premium gasoline is required for the
higher end vehicles which are owned
largely by persons better able to
sustain this price increase. However,
it should be noted that this is the first
phase of a more all encompassing
adjustment to the gas subsidy.
Statistics reveal that a large
percentage of the subsidy benefits
the higher income earners in society
who are better able to bear the
cost of unsubsidised fuel than their
more economically challenged
counterparts. So GORTT is seen to
be spending large sums of money to
aid those not at risk. However, one
must view this in the context of the
fairly recent revelation that certain
persons were purchasing subsidised
fuel in T&T to sell at a premium up
the islands. It is unclear how much
of the subsidy is to be ascribed to
that activity and whether effective
measures have been taken to halt
that unsavoury practice. This is
happening at a time when GORTT’s
income is declining and it is more
imperative that we maximise the
impact of our expenditure.
In considering further adjustment we
must examine the feasibility of the
subsidy system in providing benefit
to those more at risk and whether
there is another way to implement
it or another means of providing the
safety net to those who need it most.
The statistics indicate that higher
income earners tend to benefit more
from subsidies as they are the ones
who own more than one vehicle,
Whither the Fuel
Subsidy?
In considering further
adjustment we must
examine the feasibility
of the subsidy system in
providing benefit to those
more at risk and whether
there is another way to
implement it or another
means of providing the
safety net to those who
need it most.
21 2013 Budget Memorandum
including diesel engine SUVs and
pleasure craft. Figure 3 shows
that the highest level of subsidy is
embedded in the price of diesel.
However, the wholesale removal
or even further adjustment of the
subsidy will have far reaching
economic implications for the
country as it is widely anticipated
that such action will precipitate
increases in inflation and the cost
of living. This is expected to be
reflected in increases in the costs of
goods and public transportation.
The social and political impact of the
removal/reduction of the subsidy
is likely to be far reaching and
governments here and elsewhere
baulk at implementing unpopular
austerity measures.
One only has to remember the
situation in Nigeria recently to see
the potential impact. The Nigerian
government decided to eliminate the
country’s fuel subsidy program which
had an estimated cost to the country
of USD 8bn in 2011. Fuel prices were
increased by 115% and sparked
mass protests and unrest across the
country. In India Thomas Reuters
reported on September 13, 2012 that
the government there increased the
price of heavily subsidised diesel
recently to rein in its fiscal deficit and
counter the threat of becoming the
first of the big emerging economies
to be downgraded to economic
junk. The impact was twofold:
investors greeted it with elation and
expectation of further reforms to
reverse the investment slump and
revive the economy, but on the other
hand, there was instant political
backlash with the calling of protest
marches even by a partner in the
ruling coalition. The government in
Egypt is facing the same challenge...
how to cut massive energy subsidies
that makes up a large proportion
ofgovernment expenditure. The list
of countries goes on.
So whither the fuel subsidy? The
answer lies in finding creative ways
of providing the benefit that the
subsidy intends to those persons
in society who need it the most,
whether through greater direct tax
incentives and/or a more efficient
public transportation system. In
this regard we look forward to the
initiatives aimed at increasing the
Public Transport Service Corporation
fleet and its services, and the
introduction of Compressed Natural
Gas buses. There will also be the
need for close monitoring of prices
to ensure that price increases are
not disproportionate to additional
costs incurred by businesses with the
adjustment of the subsidy. Now that
we have seen the start of the removal
of the subsidies the government must
implement a transparent system
for monitoring the use of the funds
redirected from the subsidy program.
This system must be available to all
citizens for scrutiny.
2013 Budget Memorandum 22
Figure 1
Figure 2
Figure 3
2013 Budget Memorandum 23
Property Tax
Most observers who are
in tune with the Trinidad
and Tobago economy
will admit that property
tax continues to be one
of the most topical issues
both in terms of the
Government’s apparent
reluctance to tackle it,
as well as the skepticism
and resentment to this
issue harbored by the
population at large.
The Honourable Minister announced
in his budget presentation that
changing domestic and international
considerations have compelled
the Government to conduct a
comprehensive review of the current
tax system. This is a medium term
initiative and one of the areas
targeted for reform is Land and
Building Taxes. According to the
Minister a fair and equitable property
tax will be introduced on residential,
commercial and industrial land.
The Minister also indicated that the
waiver of the taxes will continue
until the complete framework is
implemented. The Minister did not
elaborate further on this issue and as
such there is no indication as to what
the future holds for property tax in
our twin-island state.
Most observers who are in tune
with the Trinidad and Tobago
economy will admit that property
tax continues to be one of the most
topical issues both in terms of the
Government’s apparent reluctance
to tackle it, as well as the skepticism
and resentment to this issue
harbored by the population at large.
For several years T&T operated
under an antiquated system which up
until 2009 was either ignored or not
given sufficient focus. This changed
when the then Government sought to
introduce a new property tax regime
via the Property Tax Act 2009 which
was passed in February 2010. This
required that the tax be computed on
the basis of the annual rental value
of the property and provided for the
imposition of various rates of tax
depending on the use to which the
land was put with the rates being
lower for uses such as agriculture
and higher for industry.
The legislation sparked national
controversy. It became not only a
socio economic battleground but
was a significant political issue.
The result being that the new law
was never fully implemented by the
former Government and in 2010 was
repealed by the current regime. To
date no legislation has been put in
place, which has resulted in revenue
loss at a time when the economy
is fragile and revenue creation/
generation is foremost on the
Government’s agenda.
If GORTT opts to reintroduce a
property tax system, it is imperative
that the legislators have a sound
understanding and appreciation
of the principles upon which such
a system should be based so as to
properly balance competing interests
– the Government’s right to tax and
the citizens’ right to enjoy their
property. Briefly, these principles are
as follows:
• Fiscal adequacy – i.e. the sources
of revenue should be sufficient
to sustain the demand of public
expenditure;
• Simplicity and administrative
24 2013 Budget Memorandum
Figure 1: Tax Revenue 2013
feasibility – it should be easy for
citizens to understand and be
capable of convenient, just and
effective administration;
• Equality – the tax burden should
be in proportion to the taxpayer’s
ability to pay;
• Neutrality- tax policies should
be impartial with respect to
economic activities since this
can lead to misallocation of
resources, although this principle
is often compromised in the
interest of promoting certain
activities or providing relief to
certain groups or sectors.
The elements to be identified in
preparing a property tax law are no
different from other taxes, via:
• Defining the tax base;
• Identifying the parties subject to
the tax;
• Determination of the rate of tax;
• Assignment of administrative
functions.
While infinite time can be spent
exploring the principles and
elements on which a proper system
should be based, in defining the ‘new’
regime it is important to remember
that the primary challenge with the
old system surrounds the issue of
property valuation. According to the
then Finance Minister in advocating
the Government’s position for
introducing the 2010 property tax,
the last global assessment of property
value was conducted in 1948. In the
municipal corporations property
reassessments were conducted in
1975 in the case of Port of Spain and
2008 in the case of Point Fortin. The
picture was clear, the argument was
Source: Draft Estimates of Revenue 2013
2013 Budget Memorandum 25
irrefutable – the system was largely
outdated and inadequate. There
was also the issue of the variance
between the rates charged from
region to region which created
significant inequity.
This State of affairs is contrary to
the principles identified above and
naturally demanded serious reform.
The challenge though, was that
the population was not persuaded
that the proposed solution offered
by the then Government was the
best. The main point of contention
not surprisingly was a lack of
understanding of the impact of the
proposed method of valuation.
Traditionally property has been
valued in two ways: on the basis of
the annual rental value (ARV) or
according to its expected sales price
(capital or market value). The choice
of system is largely a reflection
of historical association. While
both methods reflect the income
to be derived from a property,
their implications in respect of the
distribution of that income are at
variance. ARV reflects the income
from a property in its current use.
Capital value reflects the market’s
assessment of the income to be
derived from a property in the
future, including income generated
by more intensive use of the
property. Most commentators seem
to favour the capital value approach
since arguably it promotes a more
equitable method of valuation and
also encourages land use efficiency.
There is however another school of
thought which seems to suggest that
the economic consequences of the
two methods are not so different as
some may argue and as such political
credibility and administrative
feasibility should be the overriding
consideration in seeking to
determine value.
The reform of the system should
be based on a comprehensive and
integrated vision of the property
tax system from the setting up
and maintenance of the base to
the collection of the tax. For this
reason implementation should be
sustainable, effective and carefully
designed over a sufficient period
of time. We look forward to the
Minister’s proposal for whidespread
consultation. The principles that
should guide the process of design
of the system should be simplicity,
clarity, equity, efficiency and
affordability.
2013 Budget Memorandum 26
Since the enactment of Ordinance 1
of 1917 which brought into existence
the first income tax regime in
Trinidad and Tobago, our taxation
system has mushroomed from
generating income of £95,000 in that
first year to a current yield of $40bn
in 2012.
But what can be said of those
intervening years? There have been
some significant developments,
including:
• The introduction of the PAYE
system in 1958;
• Quarterly installments on nonemolument
income in 1963;
• Withholding tax on nonresidents
in 1966;
• Petroleum taxes in 1974; and
• Value Added Tax in 1990.
In addition to these developments,
1966 saw the establishment of the
Board of Inland Revenue charged
with the responsibility of the
administration of taxes in Trinidad
and Tobago.
Our tax system and the fiscal policies
that support it continue to evolve.
As the economy changes over time,
new markets emerge, new dynamics
take place and shifts in relative
importance between sectors and
factors of production are a natural
corollary. While views as to the
performance of the T&T economy
relative to the tax system may differ
depending on the empirical evidence
relied on, few will challenge the view
that there is an urgent need for a
reform of the tax system if there is to
be an increase in the efficiency and
maximation of revenue generation.
Tax reform is usually necessary when
there is a change in the economic
fundamentals which render
the existing taxation regulation
insufficient or misaligned to the
current functioning of the economy.
It may also be required when there
are inadequacies within the current
system. It is on the latter that this
article is focused.
Over the last four decades reform
efforts in tax administration in
developing countries have generally
centered on information technology
(IT). The gains from adopting
new technology, however, have
often failed to reach expectations.
Successful reform efforts did not
result simply from computerising
antiquated processes, but from
re-engineering whole systems.
Radical improvements in tax
administration require changes in
organisation and methods facilitated
by IT enhancements. Countries
such as India would have painfully
discovered that successful use of IT
requires restructuring and retraining
of the tax administration. Moreover,
the experience in T&T with the
introduction of Gentax bears
testimony to this fact.
It is no secret that the tax
administration in T&T has been
plagued with numerous pitfalls
and inefficiencies which have
negatively impacted not only revenue
collection, but also the attractiveness
of the investment landscape within
T&T to local and foreign investors.
Tax
Administration
Reform
27 2013 Budget Memorandum
The challenges faced by the tax
administration include deficiency
in record keeping, inadequate office
facilities and staffing constraints
to name a few. Routine processes
such as audits and objections are
unreasonably protracted which result
in significant disruptions to business
operations, financial burdens and
the creation of bottlenecks at the Tax
Appeal Board which is already bogged
down with a significant backlog of
cases stemming from disruptions in its
operations over the last few years.
An appropriate reform strategy must
consider the obstacles and constraints
arising from such organisational
rigidities as the public service rules
and regulations, including bases
for and constraints on, reward and
promotion, the salary structure,
and procedural hurdles in acquiring
expertise and equipment. Ultimately,
the pace of change and the success of
any modernisation program depend
on human resources—on the training,
skills and motivation of the people
who are expected to administer
the system and use and operate the
technology. As one observer noted
“technology alone cannot do the job
of good tax administration, and good
tax administration can be carried out
without technology.”
Any reform of the tax administration
system should be gradual and must
include:
• Improvement in the monitoring of
the performance of the tax system
by introducing regular statistics of
income reports and tax compliance
analyses;
• Reduction in revenue leakage
by improving the number and
capability of the resources
allocated to collection;
• Improvement in compliance
by focusing on the identifying
and registering those taxpayers
who are out of the net and
strengthening the enforcement
unit to allow for greater authority
in enforcing collections; and
• Modernising the tax
administration by reviewing
human resource requirements and
implanting the transformation
of the BIR to an autonomous
revenue authority with strong
management and business acumen
so that they can better understand
the environment in which their
stakeholders operate and on which
they base their decisions.
The Finance Minister has recognised
the dire need for the revamping of the
taxation system and has committed
to undertake same in 2013 with an
in-depth look at taxation policy,
administration and enforcement with
emphasis on personal income tax,
corporation tax, value added tax,
excise duties and capital and property
taxes. We look forward to the promised
consultation, and hope that it will
occur throughout the process up to and
including legislative drafting so that
we can minimise the disconnect that
sometimes occurs when policy makers,
administrators and taxpayers each
seek to apply their own understanding
of various measures.
2013 Budget Memorandum 28
Tourism is a vital part of the global
economy. Generating over USD6
trillion in 2011, international tourism
ranked as the fourth-largest industry
in the world, after fuels, chemicals,
and automotive products. Tourism
will contribute 10% of the global
GDP by 2022, or roughly USD10
trillion. The breadth of international
travel has greatly expanded in recent
years to encompass the developing
world. In 1950 just 15 destinations—
primarily European—accounted for
98% of all international arrivals.
By 2007 that figure had fallen to
57%. Once essentially excluded
from the tourism industry, the
developing world has now become
its major growth area. Tourism is
a key foreign exchange earner for
83% of developing countries and the
leading export earner for one-third
of the world’s poorest countries.
The economic might of the tourism
industry has helped transform
societies, often for the better.
Travel and tourism contributed 3.7%
of GDP in 2011 for Trinidad and
Tobago. Generating
4, 350.9 m in foreign visitor
exports in 2011 this is expected
to reach 6,710.7m by 2022. This
is an increase of 4.1% per annum,
according to the World Travel and
Tourism Council (WTTC) and is
comfortably above the world average
of 3.5%.
In acknowledging that the tourism
sector can become an important
platform to create jobs, GORTT
outlined in 2011 a Tourism Action
Plan which provides financial
incentives in several areas including
product development, marketing and
public awareness, competitiveness
and investment. Tax incentives
available for approved investment
projects include tax holidays, tax
exemptions for the sale of tourism
properties and reductions or
exemptions for import tax and
duties. These incentives are designed
to increase investment in the sector
and are intended to spur economic
growth.
The WTTC expected the Trinidad
and Tobago travel and tourism
sector to attract capital investments
of 1,162.8 m in 2011, which was
expected to rise by 3.3% in 2012 and
4% per annum over the next decade.
Projections illustrate that Trinidad
and Tobago will attract a promising
1,777.1m in travel and tourism
capital investment by 2022.
The incentives for development of
the Trinidad and Tobago tourism
sector are however plagued by a
number of setbacks. Chief amongst
these has been the spiralling crime
rate in the country. Crime has had
an adverse effect upon the industry
as the country has been portrayed
Tourism in
Trinidad and
Tobago
29 2013 Budget Memorandum
Visitor Exports and International Tourist Arrivals
Source: World Travel & Tourism Council, 2012
negatively in several international
and local media reports. Bureaucracy
continues to be yet another obstacle
on the road to the development of
a sustainable tourism product. The
tedious process of accessing tax and
other exemptions has been identified
as a detractor by local and foreign
investors in this sector.
Of 181 countries Trinidad and
Tobago is ranked by the WTTC at 116
in the relative contribution of travel
and tourism towards GDP. The total
contribution of Travel and Industry
to Trinidad and Tobago’s GDP in
2011 is 3.7% compared to a world
average of 5.2%. In its ranking of
relative contribution to employment,
Trinidad and Tobago is ranked 86
with 9.3% compared to the world
average of 13.6%.
Trinidad and Tobago was awarded
the World Best Tourism Destination
for 2012 by the European Union
Council on Tourism and Trade based
on the rich cultural heritage and
the ecological and geographical
biodiversity the country offers. This
award illustrates the potential of the
country in this sector.
We need to focus on exploring new
tourism niches and differentiating
the tourism product in order to be
competitive in the tourism market.
Projections for 2012 from the World
Travel and Tourism Council (WTTC)
show that Trinidad and Tobago
is expected to attract 424,000
international tourist arrivals.
2013 Budget Memorandum 30
Unfortunately the country has not
recovered to pre-recession arrivals
of 449, 452 in 2007. The WTTC
expects a full recovery by 2022 with
arrivals forecasted to be 616,000
growing at a rate of 3.1%. In his 2013
budget presentation the Minister of
Finance and the Economy signalled
the Government’s intention to make
Trinidad and Tobago the number
one location in the region for tourist
arrivals. Of course our Caribbean
neighbours will be actively
competing to secure or retain that
coveted spot and getting us there
will be an uphill, some might say,
insurmountable, task.
Total Contribution of Travel & Tourism to GDP
Source: World Travel & Tourism Council, 2012
Trinidad and Tobago was
awarded the World’s Best
Tourism Destination for 2012
by the European Union Council
on Tourism and Trade based on
the rich cultural heritage and
the ecological and geographical
biodiversity the country offers.
This award illustrates the
potential of the country in this
sector.
31 2013 Budget Memorandum
FATCA is an acronym for the
Foreign Account Tax Compliance
Act (FATCA), which was enacted
into law on 18 March, 2010 as part
of the Hiring Incentive to Restore
Employment (HIRE) Act. FATCA
seeks to identify US taxpayers who
have accounts in Foreign Financial
Institutions (FFI) or ownership
interests in Non-Financial Foreign
Entities (NFFE) and to enforce
information reporting through the
threat of a withholding tax.
FFI is very broadly defined and
encompasses commercial banks,
broker dealers, trust companies,
investment funds, and life insurance
companies as well as many other
entities.
FATCA requires an FFI to primarily
perform four tasks:
1. Identify new US customers;
2. Examine existing customer
information for indicia of US
status;
3. Report annually on US accounts;
and
4. Foreign ‘passthru’ withholding
on payments to recalcitrant
account holders and nonparticipating
FFIs.
These four obligations will be phased
in during the period 2013 and 2017
in accordance with a timeline to
be established by the US Internal
Revenue Service (IRS). The timely
completion of these four obligations
must be certified by an officer of the
FFI.
When fully phased in, FATCA will
require withholding agents to
withhold a 30% tax on US sourced
income (e.g., interest, dividends,
rents, royalties, annuities, etc.) on
payment to FFIs or NFFEs. More
onerously, a 30% withholding tax
will eventually be levied on gross
proceeds (not net profit) from the
sale of assets that generate US
sourced interest or dividends.
Withholding can be avoided if an
FFI enters into a binding agreement
with the IRS by July 1, 2013 and
complies with certain obligations
such as information disclosures,
documentation and other due
diligence compliance activities.
NFFEs avoid withholding by either
certifying to the IRS that it has
no US shareholders or disclosing
information about its substantial
(more than 10%) US owners.
FATCA is here to stay. The IRS has
issued three notices and almost 400
pages of proposed regulations to
date. It has essentially reaffirmed its
timetable for full implementation.
While the regulations will be
finalised in 2012, Caribbean banks
and other financial institutions need
to assess how FATCA will impact
their organisations in order to meet
the phased deadlines beginning July
1, 2013.
FATCA - Who,
what, when and
why
2013 Budget Memorandum 32
2013 2012 2011
Income Tax
Allowances/ Deductions
Severance Pay 300,000 300,000 300,000
Alimony paid No Limit No Limit No Limit
Personal Allowance 60,000 60,000 60,000
Tertiary Education Allowance 60,000 60,000 60,000
Pension/Deferred Annuity 30,000 (2) 30,000 (2) 30,000 (2)
National Insurance 70% (2) 70% (2) 70% (2)
First Time Homeowner allowance 18,000 (3) 18,000 (3) 18,000 (3)
Donations to Children ‘s Life Fund 15% of Total
Income
(4) 15% of Total
Income
15% of Total
Income
Corporation Tax
Corporation Tax Rates
(Petrochemicals)
35% 35% 35%
Corporation Tax Rates (Other) 25% 25% 25%
Small and Medium Size (SME) 10% (5) 10% (5) 0%/25% (5)
Business Levy (On Gross Sales &
Receipts)
0.20% 0.20% 0.20%
Green Fund Levy (On Gross Sales
& Receipts)
0.10% 0.10% 0.10%
Initial Allowance 90% 90% 90%
Art and Culture/ Sportsmen/
Sporting Activities
Audio / Visual / Video Production
allowance
3,000,000 (10) 2,000,000 (12) 2,000,000 (12)
Fashion Allowance 3,000,000 (10) 0 0
Production Company Allowance 3,000,000 (11) 2,000,000 (11) 2,000,000 (11)
Donations to Children’s Life Fund 15% of total
income
(4) 15% of total
income
(4) 15% of total
income
(4)
Appendices
Tax Facts 2013
33 2013 Budget Memorandum
2013 2012 2011
Petroleum Taxes
Petroleum Profits Tax
- Shallow water (shelf/block) 50% 50% 50%
- Deep water block 35% 35% 35%
Unemployment levy 5% 5% 5%
Supplemental Petroleum Tax Base & Base & Sliding
Sliding Sliding Scale
Scale Scale
Investment Income
Local Dividends Received Exempt Exempt Exempt
Interest Received (individuals) Exempt Exempt Exempt
Value Added Tax
Registration Threshold 360,000 (6) 360,000 200,000
VAT Exemptions on Offshore
Equipment
Yes (7) Yes (7) N/A
Alternative Energy Incentives
Wear and Tear Allowance (CNG) 130% (8) 130% 130%
Wear and Tear Allowance (Solar &
Wind)
150% (9) 150% 150%
Motor Vehicle Import Duty Relief
(CNG vehicles)
50% 50% N/A
Tax Facts cont’d
Note (1) For attendance at foreign Universities not GOTT Funded
Note (2) Maximum $30,000
Note (3) First-time homeowners for five years with effect from the date of acquisition
Note (4) Equal to the amount of the donations up to a maximum of 15% of the total income in any one year
Note (5) 10% rate in 2012 would apply to listed SMEs- 0% tax rate applies to ‘approved small companies’ as per
the provision of Section 16A of the Corporation Tax Act
Note (6) Effectively $30,000 per month
Note (7) Offshore Equipment relates to offshore drilling rigs, drilling ships and other vessels associated with offshore
activity in the Energy Sector
Note (8) Effective 1 January 2012, allowance based on acquisition of plant and machinery and equipment including
installation costs, for the purpose of providing a compressed natural gas kit and cylinder installation service or the
acquisition and installation in a motor vehicle of a compressed natural gas kit and cylinder
Note (9) Effective 1 January 2011, allowance based on plant and machinery, parts and materials for manufacture of
solar water heaters/ wind turbines/ solar photovoltaic systems
Note (10) 150% tax deduction up to a maximum of $3m based on the assumption that the fashion allowance is additional
allowance of $3m
Note (11) Allowance only available to production companies
Note (12) Allowance restricted to $2m of actual expenditure incurred
2013 Budget Memorandum 34
National Insurance Facts
2013 2012 2011
Maternity Benefits
Leave Period 14 weeks (a) 14/13 weeks 13 weeks
Maternity Grant 3,750 2,500 2,500
Special Maternity Grant 3,750 (b) 2,500 2,500
Retirement
Retirement Grant 3,000 (c) 3,000/2,000 2,000
Death
Funeral Grant 7,500 (d) 5,000 5,000
Death Benefit Based on rate Based on rate Based on rate
of Contribution of Contribution of Contribution
Other Benefits
Sickness Allowance,
Maternity Allowance,
Invalidity Benefit,
Employment Injury
Increase of 25% of
Earnings Class
Rate based on Rate based on
Earnings Class
Survivors Benefits
Spouse, Child, Dependent
Parents, Orphan
Details of
comparative
unavailable
Key
(a) Effective 22 May, 2012
(b) Housewife/Homemaker
(‘c) Payable to persons who have made 750 contributions or more
(d) Payable to next of kin of the deceased who has made minimum of 25 contributions
(e) Increased by 20% in 2014 resulting in cumulative increase of 50%
35 2013 Budget Memorandum
2013 2012
Profit as per Financial Statements 40,000,000 40,000,000
Add:
Depreciation 8,000,000 8,000,000
Donations not under Deed of Covenant 100,000 100,000
Arts and Culture, Audio Visual,
Sporting Donations
2,000,000
Local Fashion Sponsorship Expenses 2, 000,000
12,100,000 8,100,000
Less:
Donations to Children’s Life Fund 100,000 100,000
Arts and Culture, Audio Visual,
Sporting Allowance
3,000,000
3,000,000
-
Local Fashion Sponsorship Allowance
Wear and Tear Allowance 5,000,000 5,000,000
Initial Allowance (90%) 2,000,000 2,000,000
Profit on Sale of Asset 175,000 175,000
13,275,000 7,275,000
Chargeable Profit 38,825,000 40,825,000
Corporation Tax @ 25% 9,706,250 10,206,250
Effective Tax Rates 24% 26%
Business Levy
Gross Sales/ Receipts 500,000,000 500,000,000
Business Levy @0.2% 1,000,000 1,000,000
Green Fund Levy
Gross Sales/Receipts 500,000,000 500,000,000
Green Fund Levy @0.1% 500,000 500,000
Tax Computations
Corporation Tax Computations
2013 Budget Memorandum 36
Assumptions :
Donation’s to Children’s Life Fund is not greater than 15% of the company’s statutory total income
(100,000/40,000,000 x 100%)= 0.667%
Company is not engaged in the production of petrochemicals
Effective date of proposed changes is 1 January, 2013
Company is not engaged in local audio, visual or video production
2013 2012
Profit as per Financial Statements 250,000 250,000
Add:
Depreciation 40,000 40,000
Donations not under Deed of Covenant 6,000 6,000
46,000 46,000
Less:
Donations to Children’s Life Fund 5,000 5,000
Arts and Culture 5,000 5,000
Wear and Tear Allowance 25,000 25,000
35,000 35,000
Chargeable Profit 261,000 261,000
Corporation Tax @10% 26,100 26,100
Effective Tax Rates 10% 10%
Business Levy
Gross Sales/ Receipts 4,000,000 4,000,000
Business Levy @0.2% 8,000 8,000
Green Fund Levy
Gross Sales/Receipts 4,000,000 4,000,000
Green Fund Levy @0.1% 4,000 4,000
Small and Medium Enterprises
Corporation Tax Computation
Assumptions :
Donation’s to Children’s Life Fund is not greater than 15% of the company’s statutory total income
Company is not engaged in the production of petrochemicals
Proposed changes effective date January 1, 2013
Company is an SME listed company and is operating within the first five years of being listed
37 2013 Budget Memorandum
VALUE ADDED TAX ACT
Schedule 2 - Zero Rating
Food items
# Pre 2012/2013 budget # Additions in 2012/2013 budget
1 Unprocessed food of a kind used for human consumption
1 All foods except luxury items and alcohol (temporary)
2 Rice {N.B. no specific mention of which foods are
deemed as “luxury”}
3 Flour
4 Milk in any form, including processed and tinned milk
5 Margarine
6 Bread
7 Baby formulas and baby milk substitutes
8 Cheese and curd
9 Corned beef
10 Curry
11 Fresh Butter
12 Peanut butter
13 Table salt
14 Salted butter
15 Tinned sardines
16 Smoked herring
17 Toilet paper
18 Yeast
19 Baking powder
20 Pasta (cooked , uncooked)
21 Cane sugar
22 Cocoa powder
23 Coffee
24 Mauby
25 Orange Juice
26 Herring
27 Tuna
28 Mackerel
29 Ghee
30 Soya-bean oil
31 Maize (corn) oil and its fractions
Current VAT Zero Rating Schedule
2013 Budget Memorandum 38
32 Sesame oil and its fractions
33 Chicken sausage, canned
34 Salami sausages
35 Icing sugar
36 Preparations of malt extract
37 Corn flakes
38 Biscuits, unsweetened
39 Grapefruit juice
40 Vanilla essence
41 Soy sauce
42 Tomato ketchup
43 Prepared mustard
44 Mineral water
45 Ordinary natural water
46 Aerated beverages
47 Orange drink
48 Grapefruit drink
49 Vinegar
50 Ground Nut oils (not chemically modified NCM)
51 Olive oil (NCM)
52 Palm oil (NCM)
53 Sunflower-seed, safflower or cotton seed oil (NCM)
54 Coconut, palm kernel, Babassu oil & certain other oils
(NCM)
Current VAT Zero Rating Schedule cont’d
39 2013 Budget Memorandum
Budget Revenue & Expenditure 2012/2013
Revenue Expenditure
$bn $bn
Income and profits 32.002 Ministry of Finance(*) 12.927
Taxes on Property 0.014 Ministry of National Security 2.548
Goods and Services 8.235 Ministry of Education 4.20
International Trade 2.419 Ministry of Health 4.148
Other 0.200 Other 37.029
Property non tax revenue 5.943
Other non tax revenue 0.826 60.861
Repayment of past lending 0.036
(*) Ministry of Finance &
Charges on Account of the
Public Debt
49.677
Source : Details of Estimates of Revenue for the Financial Year 2013
Revenue-Estimate 2013
Income and profits
Goods and Services
International Trade
Other
Property non tax revenue
Other non tax revenue
Repayment of past lending
Revenue Estimates 2013
Expenditure-Estimate 2013
Ministry of Finance(*)
Ministry of National Security
Ministry of Education
Ministry of Health
Other
Expenditure Estimates 2013
40 2013 Budget Memorandum
Fiscal Revenue
Estimate
2012
Revised
Estimate
2012
Variance -
Estimate 2012 vs
Revised Estimate
2012
Estimate
2013
$m $m $m $m
Tax on Income / Profits
Petroleum Taxes 14,109.95 14,109.95 - 15,887.89
Corporation Tax 8,487.60 8,171.95 (315.66) 8,541.32
Individual Income Tax 5,351.40 5,369.82 18.43 5,806.74
Other Income Tax 1,553.60 1,711.34 157.74 1,765.86
Taxes on Property 15.00 11.40 (3.60) 14.45
Taxes on Goods and Services 8,058.03 8,041.34 (16.69) 8,235.47
Taxes on International Trade 2,248.08 2,248.11 0.03 2,419.33
Other Taxes 184.00 187.50 3.50 200.00
40,008 39,851 (156) 42,871
Source : Details of Estimates of Revenue for
the Financial Year 2013
Fiscal Revenue Estimate 2013
Petroleum Taxes
Corporation Tax
Individual Income Tax
Other Income Tax
Taxes on Property
Taxes on Goods and Services
Taxes on International Trade
Other Taxes
Fiscal Revenue Estimate 2013
Overview of 2012/13 Fiscal Revenue and
Expenditure
2013 Budget Memorandum 41
Recurrent Expenditure
Estimate
2012
Revised
Estimate
2012
Variance -
Estimate 2011
vs Revised
Estimate 2012
Estimate
2013
Variance
- Revised
Estimate 2011
vs Revised
Estimate 2013
$m $m % $m %
Ministry of Education 4,010.95 3,603.85 10% 4,208.12 17%
Ministry of Health 3,656.90 3,629.10 1% 4,148.30 14%
Ministry of National
Security
2,967.60 2,842.31 4% 2,548.01 -10%
Ministry of Finance 9,371.03 10,568.05 -13% 8,799.33 -17%
Ministry of the People and
Social Development
3,472.28 3,432.82 1% 3,386.10 -1%
Ministry of Food Production 802.18 777.21 3% 627.66 -19%
Other 29,433.51 26,873.36 9% 33,772.25 26%
53,714.46 51,726.70 4% 57,489.77 9%
Recurrent Expenditure
Ministry of Education
Ministry of Health
Ministry of National Security
Ministry of Finance
Ministry of the People and Social Development
Ministry of Food Production
Recurrent Expenditure 2013
Source : Details of Estimates of Recurrent Expenditure for the Financial year 2013
42 2013 Budget Memorandum
Head Personnel Other Development
Programme
Total
Expenditure
President 2,418,840 20,430,540 22,849,380
Auditor General 26,070,150 10,897,860 1,000,000 37,968,010
Judiciary 141,622,200 208,104,770 76,925,000 426,651,970
Industrial Court 20,755,100 21,984,530 1,450,000 44,189,630
Parliament 19,721,788 100,344,862 6,650,000 126,716,650
Service Commissions 36,886,500 62,791,110 4,000,000 103,677,610
Statutory Authorities’ Service
Commissions
3,766,400 2,300,630 6,067,030
Election & Boundaries
Commission
38,556,000 79,426,410 5,000,000 122,982,410
Tax Appeal Board 3,079,670 6,184,570 1,800,000 11,064,240
Registration, Recognition &
Certification Board
2,389,200 2,155,820 4,545,020
Public Service Appeal Board 1,632,800 1,812,120 3,444,920
Office of the Prime Minister 38,059,300 209,589,500 6,100,000 253,748,800
Tobago House of Assembly 1,986,995,000 349,950,000 2,336,945,000
Personnel Department 15,508,320 25,487,150 32,400,000 73,395,470
Ministry of Finance 364,097,700 8,435,236,350 50,668,000 8,850,002,050
Charges on Account of Public
Debt
6,410,194,720 6,410,194,720
Pensions and Gratuities 2,269,441,990 2,269,441,990
Ministry of National Security 1,326,542,000 1,221,468,990 309,600,000 2,857,610,990
Ministry of the Attorney General 52,162,620 186,151,480 18,400,000 256,714,100
Ministry of Legal Affairs 35,944,600 84,418,180 18,125,000 138,487,780
Ministry of Food Production,
Land and Marine Affairs
250,589,000 377,070,566 105,150,000 732,809,566
Ministry of Education 2,474,192,300 1,733,932,236 75,700,000 4,283,824,536
Ministry of Health 232,077,800 3,916,221,819 216,000,000 4,364,299,619
Ministry of Labour and Small &
Micro Enterprise Development
30,875,808 142,389,787 26,700,000 199,965,595
Ministry of Public
Administration
19,023,430 140,207,040 236,472,000 395,702,470
Ministry of Transport 35,373,000 865,756,005 123,700,000 1,024,829,005
Ministry of Tourism 26,875,500 145,396,272 23,010,000 195,281,772
Integrity Commission 2,088,100 27,181,900 29,270,000
Snapshot of Government Fiscal Performances
2013 Budget Memorandum 43
Environmental Commission 3,229,250 7,269,490 10,498,740
Ministry of Public Utilities 31,933,500 640,763,531 77,800,000 750,497,031
Ministry of Energy and Energy
Affairs
31,942,500 4,619,823,469 21,000,000 4,672,765,969
Ministry of Local Government 78,546,000 1,660,920,149 259,500,000 1,998,966,149
Ministry of Trade & Industry &
Investment
18,712,300 224,497,976 69,600,000 312,810,276
Ministry of the People And
Social Development
40,760,300 3,345,337,200 63,600,000 3,449,697,500
Ministry of Justice 547,570,700 253,893,830 55,872,000 857,336,530
Ministry of Tobago
Development
11,750,892 17,423,108 12,000,000 41,174,000
Ministry of Housing, Land &
Marine Affairs
38,551,000 2,288,076,925 120,765,000 2,447,392,925
Ministry of Community
Development
18,766,860 139,628,353 28,500,000 186,895,213
Ministry of the Arts and
Multiculturalism
8,368,500 287,324,255 7,000,000 302,692,755
Trinidad And Tobago Police
Service
1,263,244,000 479,935,050 69,100,000 1,812,279,050
Ministry of Foreign Affairs 124,585,000 292,795,083 25,300,000 442,680,083
Ministry of Gender, Youth And
Child Development
34,154,600 121,336,666 50,000,000 205,491,266
Ministry of the Planning And
Sustainable Development
48,659,500 101,661,166 149,970,000 300,290,666
Ministry of Sports 19,451,300 359,963,478 12,300,000 391,714,778
Ministry of Works and
Infrastructure
447,061,000 785,446,651 113,800,000 1,346,307,651
Ministry of Communications 6,799,100 49,939,050 12,500,000 69,238,150
Ministry of the Environment and
Water Resources
175,110,700 2,584,626,230 135,828,000 2,895,564,930
Ministry of Tertiary Education
and Skills
21,886,400 2,082,005,312 336,765,000 2,440,656,712
Ministry of Science and
Technology
4,727,500 235,644,180 46,300,000 286,671,680
Ministry of National Diversity
and Social Integration
6,212,500 31,423,934 14,700,000 52,336,434
Equal Opportunity 1,390,400 2,744,340 4,134,740
8,183,721,928 49,306,051,633 3,371,000,000 60,860,773,561
Snapshot of Government Fiscal Performances cont’d
Source : Details of Estimates of Expenditure for the Financial Year 2013
44 2013 Budget Memorandum
Current Account
Estimate 2012 Revised
Estimate 2012
Estimate
2013
$m $m $m
Revenue
Tax Revenue 40,007.66 39,851.42 42,871.06
Income and profit 29,502.55 29,363.07 32,001.81
Taxes on property 15.00 11.40 14.45
Goods and services 8,058.03 8,041.34 8,235.47
International trade 2,248.08 2,248.11 2,419.33
Other 184.00 187.50 200.00
Non Tax Revenue 5,662.16 6,506.67 6,805.87
Property 4,736.09 5,473.34 5,943.20
Other Non-Tax Revenue 894.01 1,001.52 826.20
Repayment of Past Lendings 32.06 31.81 36.47
Total Revenue 45,669.83 46,358.09 49,676.93
Expenditure
Personnel Expenditure 8,029.90 7,104.30 8,183.70
Salaries 5,655.70 4,961.10 5,613.10
Wages 647.70 515.20 688.90
Other 1,726.50 1,628.00 1,881.70
Goods and Services 7,743.80 6,864.60 8,000.50
Minor Equipment 409.60 367.50 505.10
Interest and Other Debt Charges 5,066.90 3,929.90 4,749.70
Transfers and Subsidiaries 21,389.90 24,450.70 26,178.70
Transfers to Statutory Bodies 6,509.40 6,163.60 6,876.10
Acquistion of Physical Assets - - 38.70
Sub - Total 49,149.50 48,880.60 54,532.50
Current Surplus / (Deficit) (3,479.70) (2,522.60) (4,855.50)
45,669.80 46,358.00 49,677.00
Snapshot of GORTT Fiscal Performance - 2013
2013 Budget Memorandum 45
Capital Account
Estimate 2012 Revised
Estimate 2012
Estimate
2013
$m $m $m
Current Surplus / (Deficit) (3,479.70) (2,522.60) (4,855.50)
Capital Revenue 16.90 41.20 47.10
Surplus / (Deficit) (3,462.80) (2,481.40) (4,808.40)
Financing 6,616.80 6,616.80 6,463.00
Changes in Cash Balances 3,008.30 1,981.70 4,673.70
6,162.30 6,117.10 6,328.30
Development Programme 3,290.10 3,270.60 3,371.00
Capital Repayment and Sinking 2,872.20 2,846.50 2,957.30
6,162.30 6,117.10 6,328.30
Snapshot of GORTT Fiscal Performance - 2013
46 2013 Budget Memorandum
Caveat
PwC has prepared this budget memorandum for their clients and associates on the principal changes announced in
the 2012/13 Budget on 1 October 2012. These changes are outlined in general terms and are for information purposes
only. It is therefore not to be acted upon without securing professional advice.
You may contact any member of our specialist tax team listed below for further discussions or enquiries on the impact
of the Budget pronouncements on your business or corporate arrangements:
Our PwC Tax Team:
Allyson West Keith Robinson
Tax Territory Leader Director
T: (868) 299-0700, x1030 T: (868) 299-2700, x1023
allyson.west@tt.pwc.com keith.g.robinson@tt.pwc.com
Brian E Jones Walter Rochester
Senior Manager Senior Manager
T: (868) 299-0700, x1012 T: (868) 299-0700, x1024
brian.ellison.jones@tt.pwc.com walter.rochester@tt.pwc.com
Karen Hackett Fanny Ursulet-Headley
Senior Manager Senior Manager
T: (868) 299-0700, x1035 T: (868) 299-0700, x1028
karen.hackett@tt.pwc.com fanny.ursulet-headley@tt.pwc.com
Rosalind Alexander
Senior Manager
T: (868) 299-0700, x1001
rosalind.alexander@tt.pwc.com
Our Office Locations:
Port of Spain San Fernando
PwC Building Guardian General Building
11-13 Victoria Avenue 17-19 Independence Avenue
Port of Spain, Trinidad, WI San Fernando, Trinidad, WI
T: (868) 299-0700 T: (868) 299-0700
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http://www.pwc.com/tt http://www.pwc.com/tt:::

for those that can't access the original in work, it's worth reading.

[Les Bain]

brb copying into MS Word

[RBphoto]

Since I in primary school, all maths problems had one answer.... Now... Not so much.

[Polydor]

http://www.pwc.com/tt/en/publications/tt-national-budget-review-2013.jhtml

sorry forgot to post link.

[gastly369]

wtfmc ....

ah go get grey by time i finish read that :\

[Conrad]

I not buying no damn electric vehicle. I not buying no damn cng conversion kit. I not buying no damn cng vehicle either.

Hahahahahahaahaaaaaa I laugh with tears in mih eye.

Seriously though and politics aside I have some questions and the convo here could produce answers from the collective.

Raising diesel is political suicide. These are politicians. Lewwe dun that there. If the premise is that they raised premium to cut into the gas subsidy I can't understand how if they are asking people to switch to super. Premium was subsidized less than super by ALOT!!!



So on average, premium was $0.73/liter to subsidize, super is $1.83

Where'd you get that graph? It suggests that we're paying waaaaaay over the average price for premium.

[Mudboy]

So Imbert brought up some good points in the debate

http://www.trinidadexpress.com/news/Gov ... 19521.html

So Howai is saying below HE WAS TOLD the price without the subsidy would be $6.21 (i.e the subsidy for premium was $2.21) So at $5.75 there is still a subsidy of $0.46 according to what HE WAS TOLD.

Now remember yesterday I quoted this part from the article

http://www.trinidadexpress.com/news/_No ... 92191.html

Audit and accounting firm PricewaterhouseCoopers said, in its budget review yesterday, premium gas is the least subsidised of gases.

"Based on information provided by the Energy Chamber in its presentation to UWI Management in July of this year, the subsidy on premium gas was only $0.73 per litre, while that on super gasoline was $1.83 and on diesel $2.71. Real savings are therefore likely to come only when the measure is extended to the other fuels."

So how come the subsidy on premium gone from $0.73 per litre to $2.21 per litre? That would've meant that premium was being subsidised more than super ($1.83) and just 50 cents short of the diesel subsidy. WTF really going on here?

This was Howai's response to it all.

Finance Minister Larry Howai says he is not aware that the Government broke any law when it increased the price of premium gasoline in the 2012/2013 budget.

This was his response in an interview with TV6 News which aired last night about a claim made by Opposition MP Colm Imbert that the hike in the price of a litre of premium gasoline from $4 to $5.75 was in breach of the Petroleum Levy and Subsidy Act.

"This is the first I'm hearing of it," Howai said.

Imbert said the Act, passed during in 1973, stipulates that all oil companies in Trinidad and Tobago pay a levy to help reduce the local retail price of petroleum products, including super and premium gasoline and diesel.

Howai said Finance Ministry officials looked at the whole issue of the reduction of the subsidy in premium gasoline.

[b]"Without the subsidy, yes, I'm told that the price would be ($)6.21 we are actually at ($)5.75 so there is still an element of subsidy inside of there so the whole issue of contravening the law doesn't really arise as far as we could see," Howai said.[/b]

He however said he has asked officials at the Finance Ministry to take a second look "to see whether there is any substance" to Imbert's claim.

"But, as far as we're aware, at the moment certainly we are not in contravention in any law that is basically our position at this point in time," Howai said.

Imbert claimed the oil petroleum levy now accounted for $1 billion of the $4.7 billion fuel subsidy.

In response to a question from TV6 News, Howai said he was aware of the Act and added that the levy placed on the multinational energy giants that extracted oil from the land and marine reserves in Trinidad and Tobago was now "in the region of about $700 million."

"And so, for example, when we quoted, we say the subsidy is $4.4 billion and what we do is we deduct the $700 million. So you may sometimes hear numbers quoted that the subsidy is $3.7 billion and sometimes you hear is ($)4.4 (billion) and, I know, sometimes the public gets confused and they don't know if it's 3 billion, 3.7 or 4.4," Howai said.

He explained that "some people" may quote the net subsidy figure (minus the petroleum levy) while others may quote the gross subsidy figure (with the petroleum levy).

"In determining what the overall requirement is for this year we would have taken, done our own projections, of where the petroleum subsidy comes in to determine what exactly would be the requirement for this year," Howai said.

http://www.trinidadexpress.com/news/___ ... 19511.html

All I read was Minister Howai was told the the price without the subsidy would be $6.21.
You decided to produce a budget with some figures somebody told you? Imbert making them boys look real small with their lack of knowledge.

[Conrad]

All I read was Minister Howai was told the the price without the subsidy would be $6.21.
You decided to produce a budget with some figures somebody told you? Imbert making them boys look real small with their lack of knowledge.

Sadly this would hit the newspaper/rumshop for a max of 10 days and we'll be on to another more current affair that grabs out attention and Min. Howai would escape unscathed...unless people call the PM name 3 times like in Candyman for him to be fire.

[S_2NR]

PP is a failure. Trinidad is one jokey country, its crazy. Only thing left to do is take everything in stride and wine wine wine wine/migrate.

[kurpal_v2]

PP is a failure. Trinidad is one jokey country, its crazy. Only thing left to do is take everything in stride and wine wine wine wine/migrate.

http://www.aa.com/homePage.do?locale=en_TT&pref=true

[~Vēġó~]

All I read was Minister Howai was told the the price without the subsidy would be $6.21.
You decided to produce a budget with some figures somebody told you? Imbert making them boys look real small with their lack of knowledge.

Sadly this would hit the newspaper/rumshop for a max of 10 days and we'll be on to another more current affair that grabs out attention and Min. Howai would escape unscathed...unless people call the PM name 3 times like in Candyman for him to be fire.

I certainly hope not.....but then what if they recant the premium price and raise super instead....

[pioneer]

So where are the sheep?

Also none of these ministers do any research/work for themselves, they have highly paid "special advisers" that provide these "stats" for them. So if faggotbarry "told" kamla 6% of cars on the road use premium...guess what...it's 6%...bess belieee dat son.

I so glad the University of the West Indies is schooling this government with real statistics with economic insights. The PP's minds prolly blown right now, they prolly feeling like a buncha utt/costatt graduates.

[S_2NR]

PP is a failure. Trinidad is one jokey country, its crazy. Only thing left to do is take everything in stride and wine wine wine wine/migrate.

http://www.aa.com/homePage.do?locale=en_TT&pref=true

*bookmarked*

Thank you for making this process more convenient.

I appreciate it