The Minister of Finance and the Economy, Sen. the Hon. Larry Howai reads the Appropriation (Financial Year 2015) Bill, 2014 during the 3rd Sitting of the House of Representatives on Monday 8th September, 2014. (© 2014 Office the Parliament.)
PORT-OF-SPAIN, Trinidad, Tuesday September 9, 2014, CMC – The Trinidad and Tobago government Monday presented a TT$64.4 billion (One TT dollar =US$0.16 cents) budget to Parliament announcing a number of incentives and a tax amnesty for defaulters.
Finance Minister Larry Howai during a presentation lasting just over two hours, said that the budget was based on a price of a barrel of oil at US$80 and a gar price of US$2.75 per mmBtu.
He said the total revenue was estimated at TT$60.35 billion with the non-oil sector accounting for TT$39.12 billion.
He told legislators that the total expenditure net of capital repayments and sinking fund contributions stood at TT$64.664 billion and that the fiscal year, the government envisages a fiscal deficit of 2.3 per cent of Gross Domestic Product (GDP), down from the 3.6 per cent during the last fiscal year.
He said that this year’s fiscal package is “in keeping with our commitment to reduce the deficit by one per cent per year.
“We are making the appropriate capital investments to drive modernization but this is being done in the context of the consolidation of our fiscal situation. We are ensuring that the budget deficit does not undermine monetary stability nor crowd out the private sector,” Howai told legislators.
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He said was offering an amnesty for tax penalties and interest for late filing of returns and late payment of income, corporation and Value-Added Taxes, business levy and environmental levy.
“The amnesty will apply to returns, penalties and interest on outstanding tax liabilities for years of income up to 2013. Accordingly, all individuals and corporations who have outstanding tax returns or outstanding tax liabilities and associated interest charges will have these interest and penalties waived if they comply by March 31,” he said.
Howai said that the measure will require amendments to the Income Tax Act, the Corporation Tax Act and the Value Added Tax Act and will take place with immediate effect and will expire on March 31, 2015.
The Finance Minister said he was also proposing to waive all penalties outstanding or chargeable on the filing by corporations of documents with the Registrar of Companies. The proposed waiver will be applicable until March 31, next year.
The government has also announced plans to introduce a savings bond which will allow small investors and pensioners to purchase bonds in much smaller denominations, including TT$1,000 per bond.
He said purchases of bonds from the Government will be tax deductible up to TT$5,000 per annum for a period of five years.
Howai said that the government intends to expand the social safety net by modifying a number of benefits effective October 1, this year.
These include a TT$300 monthly increase in the disability grant that will cost the state TT$86.8 million and an increase of the public assistance grant of TT$300 that will cost TT$89.3 million annually.
Howai said that the personal allowances for individuals aged 60 and over will be increased from TT$60,000 to TT$72,000 and a new programme will provide financial assistance in an amount of $500 per month for one year only for any child born to under privileged parents during the course of the next fiscal year.
He said the families of deceased security personally will benefit from a new Fund from which could be drawn the sum of one million dollars which will be placed in the estate of a member of the State protective services killed in the line of duty.
He said effective from October 1, 2014, the government proposes to increase the procurement value under the Fair-Share Programme from one million to TT$1.5 million, to further boost the small business sector.
The pension for senior citizens will be increase by TT$500 from October 1 and the government said the monthly pension for retired public officers will be increased by the same amount.
The government says it intends to bring the self-employed into the national insurance system with an amendment to the National Insurance Act.
“This proposal will be effective January 1, 2015 and will impact initially 11,300 self-employed.
To that end any self-employed person in the age group 57 and over at the commencement of coverage in the year 2015 will receive a one-off payment equivalent to three times their contribution.
“Anyone in the age group 50-56 at the commencement of this coverage who contributed fully in each year prior to retirement will be credited with additional contributions to allow them to receive the minimum monthly pension payments,” he added.
Howai said the government also intends to inject TT$12.9 million into the national insurance system to cover the cost of the additional contributions for those self-employed individuals and the subsidization for the payment of contributions by low-income self-employed persons.
The government has also announced that it will increase the minimum wage from the current TT$12.50 per hour to $15.00 per hour, effective January 1, next year and is also offering new incentives to home owners.
Howai said that the government proposes to expand the existing two per cent mortgage programme by increasing qualifying property values from TT$625,000 to TT$850,000 and by increasing the combined monthly income of households from TT$8,000 to TT$10,000 and to supplement that programme by introducing a new five per cent mortgage programme for households with a combined monthly income of greater than TT$10,000 and less than TT$30,000, towards accessing a mortgage greater than TT$850,000 but not exceeding TT$1.2 million.
Howai said he is also proposing to meet the outstanding reimbursements owed since 2005 to registered maxi-taxi owners for their payments of Motor Vehicle taxes and Value Added Tax.
He said he proposes from January next year to exempt motor vehicle tax and VAT on new or used hybrid and electric-powered vehicles not older than two years for a period of five years for private or commercial use.
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Trinidad finance minister presents tax-free TT$64 billion budget
