Trinidad & Tobago Budget Presentation 2020: Highlights October 7th 2019

[pugboy]

Did he mention anything about the proper taxation and revenue checking of casinos ?

[sMASH]

what is that with the agri and tax ? i missed that part. registered farmers will no longer have to pay taxes and duties on inputs to agriculture.

also, can someone explain how the bond ting with the businesses and vat, will work. i just dont have the knowledge to understand how it works.

If the gov't owes you VAT refunds, instead of paying cash they are offering you gov't bonds for 5 years (I missed the interest rate), You can cash in the bonds before time but you will not get the full face value if you do.

dais reall bad man scenes. he can be mistaken for running a gang. that is like extortion.

How so? What he has done is transfer the debt to the private sector, the bonds earn 1.5% per annum and can be used as collateral for borrowing or they are transferable so they can be sold at whatever rate is negotiated between the bond holder and the buyer to access liquid cash. Considering the alternative might have been a longer wait for refunds this may be a good option

a bird in the hand is worth two in the bush.

rather than give back the people their monies as soon as, they are holding it longer. it wasnt given with the intention to go towards a bond. when the business could have used to to expand/upgrade, they now have part of their monies tied up in a 1.5% bond.
the earning potential could be a lot higher if ploughed back into the business, than tied up in a bond... with 1.5%. u can trade and sell the bonds, yes, but at what reduced price?
he gangster the people them VAT rebates.

[pugboy]

If the interest rate is good, a lot of entities will buy the bonds from you and give you cash up front.

Eg insurance companies and pension plans use bonds as a safe way to earn interest to pay the persons in their pension plans etc.

I am not sure 1.5% is attractive to them though and remember stock market has fees on trading,
.2% of value or something like that.

[vaiostation]

Mexican coconuts for allyuh to eat.

1% to control agriculture (private / public) at Orange Grove (my interpretation). They already growing coconuts in the back.

1% controlled the agriculture sector for a while now. All of agriculture food imports aren't taxed, that's why certian importers can bring in goods at a lower price than locally grown produce. Not only that, some 1% companies import tons of harsh chemicals and push it on unexpecting farmers that's why some people basically eating poison.

Also, them coconuts coming here illegally, but nobody ain't doing nothing about it. Who inspecting these nuts for pest and diseases? What about our dying indigenous coconut? The ministry of agriculture had ways to solve the issues, but the government stopped any rectification methods. Perhaps they want de local coconut industry, to go the way of flavourite ice cream, where competitors are demolished, so some financiers could control the market.

[pugboy]

in the long run it is not transferred to the private sector because at the end of the 5 year period

it is still the govt who has to find money to pay back the money to whoever is the holder of the bonds at that time
be it the original person who was owed the vat refund or somebody else who bought over the bond.

what is that with the agri and tax ? i missed that part. registered farmers will no longer have to pay taxes and duties on inputs to agriculture.

also, can someone explain how the bond ting with the businesses and vat, will work. i just dont have the knowledge to understand how it works.

If the gov't owes you VAT refunds, instead of paying cash they are offering you gov't bonds for 5 years (I missed the interest rate), You can cash in the bonds before time but you will not get the full face value if you do.

dais reall bad man scenes. he can be mistaken for running a gang. that is like extortion.

How so? What he has done is transfer the debt to the private sector, the bonds earn 1.5% per annum and can be used as collateral for borrowing or they are transferable so they can be sold at whatever rate is negotiated between the bond holder and the buyer to access liquid cash. Considering the alternative might have been a longer wait for refunds this may be a good option

[shake d livin wake d dead]

I always wondered, what do countries without deposits of oil base their budget on?

Agriculture my friend

[eliteauto]

They base it on whatever is their primary source of income

[zoom rader]

Nothing for me cows?

[shake d livin wake d dead]

I taught the curepe interchange finishing in nov...now it gone to jan

[sMASH]

Nothing for me cows?

JUST IN TIME!!!!!!!!!!!!!!!
woi!!!!!!!!!

[linton]

I always wondered, what do countries without deposits of oil base their budget on?

Agriculture my friend

Agriculture, Tourism , Manufacture and many other sectors. Not all countries are blessed with oil. Sometimes the blessing is a curse. Look how we destroyed our other resources like citrus, cocoa, coffee, coconut , pitch etc. from the time we got oil.

[Dizzy28]

CNC3 said March 2020

I taught the curepe interchange finishing in nov...now it gone to jan

[Duane 3NE 2NR]

Finance Minister Colm Imbert read the 2020 Budget in the House of Representatives Monday.

The theme of the 2020 Budget was 'Stability, Strength and Growth'.

The Minister announced an estimated revenue of $47.749 billion and total expenditure of $53.036 billion, resulting in a fiscal deficit of $5.287 billion.

The budget was based on a projected oil price of US$60 and a gas price of US$3 per MMBtu.

The highest allocation went to Education and Training, amounting to $7.5 billion, with National Security getting $6.044 billion and Health being allocated $6.084 billion.

The Tobago House of Assembly was allocated $2.283B. This included $2.033B for recurrent expenditure, $231.6M for capital expenditure and $18M for the URP Tobago.

Here are some highlights of the minister address.

BUDGET HIGHLIGHTS

* No more need for life certificates to be presented by pensioners to Treasury.

* Elimination of arrival forms at airports.

* Removal of all taxes and duties on LED bulbs for five years.

* Increase investment tax credit for energy companies from 20% to 25% to stimulate exploration and development investment from Jan 1, 2020.

* On-the-job-training increase stipends by 10% and increase intake for the programme to 8000 trainees from December 1, 2019

* Increase of minimum wage from $15 to $17.50 per hour from December 1, 2019, to benefit 194,000 persons

* Increase in personal goods that can be imported without incurring Custom duties from $3,000 to $5,000 from December 1, 2019.

* Increase in tax allowance from $3M to $6M for corporate sponsorship of nationals in sporting activities, culture, arts, culture, audiovisual production, the local fashion industry.

* To amend Corporative Societies Act to increase the limit of $5,000 to transfer of shares to another person on death of a member, to $50,000.

* Increase wages of CEPEP workers by 15% and increase fees paid to CEPEP workers by 15% from December 1, 2019.

* Increase wages of URP workers by 15% from December 1, 2019.

* Daily-paid workers in Public Service be eligible for minimum Public Service pension of $3,500/month. This will be a contributory pension plan. Will take effect in 2020.

* Ban importation of styrofoam in the food industry and to terminate use of plastic water bottles in government offices from January 1, 2020.

* Removal of all taxes and duties on all inputs for farmers. Farming to become a tax-free industry.

* $3 billion in interest-bearing government bonds to registered VAT businesses to meet their VAT arrears. Tenure of 5 years and interest of 1.5% per annum.

* New operator for the Magdelena Grand in Tobago. Hotel to be rebranded under the new operator.

* 25 buses will be on roads by December 2019 powered by CNG.

* T&T Revenue Authority will become operational in fiscal 2020.

* Point Fortin highway scheduled to be completed at the end of 2020.

* Curepe Interchange to be commissioned by March 2020.

* New license plates for more security and to prevent fraud.

* Parking meters in Port-of-Spain and San Fernando.

* Traffic tickets to be paid through TTPost, freeing up the courts from the burden of ticket fines.

* Two new state-of-the-art fast ferries in 2020.

* Restoration of President's House is nearing completion and will soon be occupied by the president.



* Heritage Petroleum Limited already profitable. Revenue of $3.287B in first three quarters resulting in net profit of $543.5M.

* bpTT made payment of $1B in 2019 and Shell US$282M or $1.9B as settlement of arrears and legacy payments.

* Replacement of all incandescent bulbs to more energy-efficient ones to households free of charge across Trinidad and Tobago - 400,000.

* 6,000 new houses by December 2020 and 3,000 per annum thereafter.

* New housing loan initiative where low-interest loans will be made available with Govt guarantees up to $300,000 to people who want to build their own homes.

* New Sangre Grande hospital due in November 2021.

* $60M Roxborough hospital with commissioning scheduled for 2021.

* Daycare centres to cater for children under three years old for female-headed households who meet necessary criteria.

* Homeless females displaced by conflict, violent crimes etc - proposed centres to be established by the HDC with support of the business community in specific geographical areas, to provide temporary relief to women who are homeless.

* 200 tablets for police vehicles for immediate referencing of traffic offenders, 50 dashboard cameras, 300 body cameras, surveillance drones, polygraph equipment & drug-testing equipment for police officers.

* Approval to THA to utilise bond financing up to $300M to finance critical projects based on credit-worthiness of THA.

[zoom rader]

A budget for vennies and PNM ppl.

1% will make a mint

[bluefete]

A budget for vennies and PNM ppl.

1% will make a mint

Wait, nuh. As yuh say dat:

Ent Rowley is a registered farmer?

Ent Faris owns the largest coconut estate in T&T?

Who de france this budget is really for?

[bluefete]

Nothing for me cows?

All your cows will be tax free now.

[Redman]

what is that with the agri and tax ? i missed that part.

also, can someone explain how the bond ting with the businesses and vat, will work. i just dont have the knowledge to understand how it works.

A bond is just a mechanism to lend a fixed amount of money in exchange for an interest rate and a principle repayment

So you have 1M in refunds to get.

GORTT gives you 1M in bonds-or 1000 bonds with a PAR value of $1000 each.
They agree to pay $15.00TTD per year to the owner of each bond on the record date.-At issue this equates to 1.5%
At the end of the 5 year period you get back the GORTT will pay $1000 per bond to the owner on record at the time.

Note that the only two things that are fixed is the $ value at maturity($1000)and the $ value of the interest($15 per bond)

As the owner of the bond you can sell it into the market,hold or use as collateral.
The owner of the bond will have the risk of the price movement based on the market.
So you might sell in the 950-975 range per 1000 par value-based on how the market feels about the risk associated with holding to maturity or in the right environment it could trade above par-1005/1010.

The FIXED stream of INCOME($15.00) is yours regardless of what price you pay for the bond.

If you buy it below par (say 750) that $15 will represent a higher % than it would at par.
If you buy it at $750 (per 1000) that $15 will represent 2% interest rate.
vice versa if you buy it above par.

In a liquid market the value the bond will trade and will move so the income stream matches the interest rates for similar issuers and maturity dates.


I think he priced the bond at 1.5% to be a cash alternative-All the major funds-pension plans NIB UTC will all use this as a cash reserve.
Given the short term nature-5years I think the market will treat this as near cash.
So I dont think the discounts will be to large.

[sMASH]

is only if u buying thousands of those bonds, the returns might justify the 1.5%.
u mentioned sumting there.

"the risk associated with holding to maturity"

if the bond is guaranteed, there should be no risk to anticipate. u buy bonds, u wait till the time, u cash in and get ur money +1.5 per year.

what is this risk u speak of?

[pugboy]

The original sign by cupere said december

CNC3 said March 2020

I taught the curepe interchange finishing in nov...now it gone to jan

[paid_influencer]

is only if u buying thousands of those bonds, the returns might justify the 1.5%.
u mentioned sumting there.

"the risk associated with holding to maturity"

if the bond is guaranteed, there should be no risk to anticipate. u buy bonds, u wait till the time, u cash in and get ur money +1.5 per year.

what is this risk u speak of?

there is a very real possibility in 5 years your TTD would be worth jack shat. You hold 1.5% per annum while the dollar go to 10:1.

[bluefete]

The book of faces is lit this evening.




"Insulting The Working Class "

In Trinidad and Tobago an es­ti­mated, 30 per cent of the work­ing pop­u­la­tion reportedly earned min­i­mum wage.

According to the Central Statistical Office, 77 per cent of this country’s workforce earns a monthly salary less than $6,000.

The Minimum Wages Board was established in March 1977, pursuant to the provisions of Section 4 of the Minimum Wages Act Chapter 88:04.

The National Minimum Wage Rate was introduced in Trinidad and Tobago in April 1998 by the UNC government.

It was first established at $7.00 per hour and subsequently increased in January 2003 to $8.00 per hour and then to $9.00 per hour in March 2005.

The National Minimum Wage was increased from $9.00 per hour to $12.50 per hour with effect from January 2010, and subsequently from $12.50 per hour to $15.00 per hour with effect from January 2015.

The minimum wage is also at a disadvantage when compared to the old age pension. The minimum wage at present is estimated at $2,400 a month while the old age pension grant is appropriately $3,500 a month.

That is a $1,100 difference, one will argue that there has to be balance and possibly the establishment of a national "living wage" in this country possibly at $20.00 per hour.

Additionally, the Rowley led PNM raised the price of gas in Trinidad and Tobago three time in just four years, this has led to a drastic increase in the cost of living in this country.

The Rowley led PNM after 4 years of being in government, today in its budget presentation proposed raising of the minimum wage from $15.00 per hour to $17.50 per hour.

An overall increase of $2.50 to take effect in December 2019.

One will also expect to hear the cries of the business community in this country who will object to the raise on the basis that they are not making any money in the present economic climate under the Rowley led PNM.

It should be noted that while larger employers can more than afford to pay the proposed minimum wage increase they are small and medium sized business which will simply not be able to afford the increase.

Then there is the issue of Venezuelan workers in Trinidad and Tobago who are paid lower than minimum wage by unscrupulous employers.

Will Venezuelan workers be paid minimum wage as well, given that they do not have to pay National Insurance and Health Surcharge.

While Tobagoians earning minimum wage are required to pay National Insurance and Health Surcharge.

This is beyond ridiculous, clearly the Rowley Led PNM did not give much thought to the implementation of a increase in the minimum wage.

This pitiful proposed increase in the minimum wage is nothing more than a election ploy to fool gullible voters.

G.R. Rampersad

[bluefete]

is only if u buying thousands of those bonds, the returns might justify the 1.5%.
u mentioned sumting there.

"the risk associated with holding to maturity"

if the bond is guaranteed, there should be no risk to anticipate. u buy bonds, u wait till the time, u cash in and get ur money +1.5 per year.

what is this risk u speak of?

there is a very real possibility in 5 years your TTD would be worth jack shat. You hold 1.5% per annum while the dollar go to 10:1.

He gave the interest rate close to the inflation rate at this time. In 5 years, that interest rate might be worth jack sprat.

[Redman]

@smash
Well a Guarantee from Switzerland is better(MUCH MUCH MUCH BETTER) than from a garantee from Zimbabwe.

Who do you trust more?

A the quality of the garantee matches the issuer's ability to pay.

The perception of the credit worthiness of the issuer is what causes price movement in the market

[pugboy]

The risk is that the bond issuer goes bust, which technically should not happen as it is backed by the govt.
A lot of owings have been cleared by issuing bonds
Eg public servant backpay.

Of course few would buy into a bond issued by the vene govt.
We haven’t reached that risk status as yet.

is only if u buying thousands of those bonds, the returns might justify the 1.5%.
u mentioned sumting there.

"the risk associated with holding to maturity"

if the bond is guaranteed, there should be no risk to anticipate. u buy bonds, u wait till the time, u cash in and get ur money +1.5 per year.

what is this risk u speak of?

[randolphinshan]

A well presented, splendid budget by our finance minister as always. T&T on the correct road to recovery from 2010-2015.

Truer words have not been typed. Well done Colm and the PNM. After saving us from bankruptcy during the 2010-2015 bandit regime Colm has worked another miracle.Tax free agriculture, increased minimum wage, more money for OJT like dedragon and Zoom, no new taxes, modernizing of the police service, new hospitals soon and the list goes on

[Redman]

And it is at this point I would like to say that since the GORTT elected to treat the CLICO EFPA holders in the way they did,we have had GORTT effectively default on a Principal and Interest Guarantee.

[De Dragon]

A well presented, splendid budget by our finance minister as always. T&T on the correct road to recovery from 2010-2015.

Truer words have not been typed. Well done Colm and the PNM. After saving us from bankruptcy during the 2010-2015 bandit regime Colm has worked another miracle.Tax free agriculture, increased minimum wage, more money for OJT like dedragon and Zoom, no new taxes, modernizing of the police service, new hospitals soon and the list goes on

Tunts, you know that like you, everything you listed there are token measures right? Then again, small minds tend to think small, and are easily impressed by small things.
What you strangely don't mention, is the one that directly affects you, the 15% increase for CEPEP workers.

[sMASH]

i was expecting the PNM gollums to be gasping and frothing for not having the property tax instituted.

was leaving out the property tax a good ting or a bad ting? budget day light bulb crew, speak out!!

[Ragnor]

Wait Wait there are ppl actually agreeing and SUPPORTING the proposed VAT refund structure. It is seriously the dumbest idea I have ever heard.

Firstly, they offering 1.5% per annum rate on returns. The risk-free rate for 5-year bonds TT DENOMINATED is 3.56%, inflation annual is on average 2.0% per annum so the real rate is NEGATIVE 0.5%. Business owners losing purchasing power.

The bank deposit rate is 0.2% CONVERTED TO EAR is slightly above 2.4% per annum so you as a business owner getting more at the bank.

Secondly, in the VAT ACT, they state that arrears accumulate at a rate of 1% per cent PER MONTH AFTER A 6 MONTH PERIOD ( I have to check again to make sure). Convert that to an annual rate it is slightly above 12% per annum.

They effectively borrowing from business owners at 0% PER CENT. A cheap source of financing. You can sell it through factor invoicing but the bond will MOST DEF sell at below PAR VALUE.

[pugboy]

Yup,1.5% is a real mamaguy

They should be paying all the buildings they rent from ferris and he fadda in law with bonds