AMCHAM T&T’s INITIAL RESPONSE TO THE 2017 NATIONAL BUDGET
The American Chamber of Commerce of Trinidad & Tobago (AMCHAM T&T) acknowledges the philosophy and the framework of the Budget, as we strive to address the current economic challenges. The government has recognised that it cannot be business as usual and has taken steps to cut back on expenditure, but we are of the view that more needs to be done particularly in reference to transfers and subsidies. We would like to thank the Ministry of Finance for taking on board the recommendations of the private sector particularly those outlined by AMCHAM T&T, in particular moves to boost investment facilitation and raising revenue through the sale of shares in state enterprises.
Moreover AMCHAM T&T welcomes the full operationalisation of the Public Procurement Act, the appointment of a Procurement Regulator and the establishment of the Office of the Procurement Regulator and procurement units in the public service in the next six months. We commend the Government’s commitment to establish the Revenue Authority, and we await further details.
We commend the review of the Petroleum tax regime inclusive of the Supplemental Petroleum Tax (SPT), and we hope to be included in these discussions. However, we are disappointed in the introduction of the 30 percent increase in Corporation Tax on chargeable profit of one million dollars. The increase in this tax is counter-intuitive to the thrust of developing entrepreneurial activity. In addition, the higher effective tax rate will act as a disincentive to new investments, particularly in the non-energy sectors. This is an additional burden coming on the heels of the increase of the Business and Green Fund Levy.
We recommended and support the consideration of transfer pricing legislation. We however urge consultation, early and meaningfully, as the country should not enact legislation which goes so far that it acts as a disincentive for investment and economic activity. This is pertinent as we seek to encourage trade and export and more of our local companies are themselves seeking to become multinationals.
The Information Communication Technology (ICT) policy for education is an extremely positive step as the country seeks to create a modern workforce that can compete in the knowledge economy.
We also welcome the sale of shares in the state enterprises and the creation of the high level team to review significant investments.
The FATCA extension is welcome. We urge both sides not to squander the opportunity and for the Government and Opposition to set and agree on clear timelines in Parliament for passage.
The reduction in Transfers and Subsidies, particularly restructuring the URP and CEPEP programs has long been advocated for by AMCHAM T&T. While there has been successive announcements of returning these programs to their policy moorings, AMCHAM T&T is concerned that sufficient action has not been taken to give effect to reducing these expenditures to sustainable levels.
AMCHAM T&T is disappointed that the Minister announced the online tax without consultation as he committed to discuss with AMCHAM T&T and other stakeholders prior to the budget.
We await details on valuations for the property tax and once again urge that uncovered plants, rigs and machinery not be included in the value of the property, as this would present a challenge to some companies.
The removal of VAT on ship repairs is a very positive move, as we believe this will this will assist the industry. It is important to note that this is an export industry which earns foreign exchange.
Overall we believe that this is a positive budget and we believe that the announcement of Private Public Partnerships (PPP) is welcome as consultation needs to continue. AMCHAM T&T is committed to playing our part.