In T&T: 44% GAS HIKE

2 October 2012


Super + gas treatment time? Gov’t seeks to enhance competitiveness and revenue stream by phasing out fuel subsidy.

Motorists who use premium gas will be the main persons to feel the pinch from Minister of Finance Larry Howai’s first budget, presented yesterday in the Parliament.
The environmentally-friendly premium gas has gone up by $1.75 per litre- from $4 to $5.75. That means if motorists paid $160 to fill their 40 litre tanks before the presentation of the 2013 budget, they would now pay $230.
In increasing the premium gas by 43.75 per cent, the Minister was cautious not to touch diesel and super gasoline. It means that the majority of the travelling public who use taxis should be spared increases in transportation costs. Furthermore, he said 100 new CNG buses would be added to the public transport fleet “ensuring the cost of the service remains cost-effective”.
What was unusual about the premium gas increase was that it was not effective immediately upon the announcement yesterday, but takes effect from today. This caused a rush for gas yesterday afternoon as people seized the last opportunity to fill their tanks at the old price.
Howai, whose $58.405 billion budget is the largest presented to date, said revenue initiatives would include “reform” of the land and building tax regime “during the course of the next fiscal year” and “a comprehensive review of the entire tax system”, but gave no details. He also said there would be “rigorous review” of subsidies and transfer to State Enterprises “which currently absorb 20 per cent of the national budget”.
He also announced a “rigorous review” of the social welfare programmes “with a view to assisting comprehensively and cost effectively the differently-abled, senior citizens, single moms and children and others in need of assistance. But, he stressed: “We shall now move to make cash transfers conditional, in particular they would be tied to changed behaviours and proper parenting with children being required to be in school, be exposed to basic healthcare and the absence of abuse.”
The budget, whose theme was “Stimulating Growth, Generating Prosperity” was a “judicious mix” of measures aimed at a providing a strong stimulus boost, while curbing extravagant spending.
It was not by any means an austerity budget. For the poor, the middle-class and even the high-end earner there was something in the banker’s budget.
The most punitive tax hike came in the form of a “sin” tax -directed at the gaming industry. There was a “very small” increase in NIS contribution rate from 11.4 per cent to 11.7 per cent in 2013 and 12 per cent in 2014 for “ 0.1 per cent” of employees and 0.2 per cent of employers, he said.
The Minister announced that NIS benefits payments (except pension) would be increased by overall 50 per cent. Sickness, maternity allowance, invalidity, survivor’s and employment injury will be increased by 25 per cent in 2013 and 20 per cent in 2014. Meanwhile, minimum survivor’s benefits- in respect of spouses, children, dependent parents and orphan children of a deceased contributor or a NIS pensioner—would be increased to $600 for spouse, child, dependent parent and $1,200 for orphans.
He said the non-taxable special ($1,000 monthly) allowance, now being paid to members of the protective services would be extended to include the Special Reserve Police (SRP) Officers. “That takes effect…” he said. “Today!” National Security Minister Jack Warner thundered approvingly.
To promote home ownership especially in the lower and middle class bracket, the Minister announced an incentive to the developer for homes costing $1.5 million or less.
For the upper-class, the Minister gave exemptions from custom duties and VAT for the purchase of CCTV cameras and digital video recording equipment for home-owners, community and business security.
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