This article is a 20 min read.
This article is a 20 min read.
TT$50 million will be allocated for the acquisition of computers for needy students.
To underpin and support this measure on the 5th September 2020, all taxes on computers and tablets was removed.
As part of GORTT’s digital thrust, the provision of internet will be expanded through the Adopt a School Initiative and teachers will be educated in the field of information and technology through the ICT Teacher Professional Development Programme.
Under the Accelerated Construction Programme 25,000 new homes will be delivered by the Housing Development Corporation over the next ten years.
HDC plans to:
GORTT plans to encourage the private sector to deliver a further 10,000 housing units over the next ten years with the overall plan being to target the provision of housing for families who earn less than TT$10,000 per month.
Loan for new homeowners will be provided at a subsidised rate of 2% over 30 years with a down payment of 5% for those in the higher income brackets. To finance this initiative GORTT will provide a guaranteed loan facility to the HDC of TT$1 billion.
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A consistent and reliable electricity service, an adequate water supply and efficient sewage treatment are considered by GORTT to be essential to the development of Trinidad and Tobago.
They are also essential to assist with combatting COVID-19.
There is some bad news on this front. To improve each of the services, adjustments to the tariffs charged may be required.
A cabinet sub-committee is undertaking a review of the operations of WASA. This review includes an assessment of WASA’s unsustainable debt position, aging pipelines, governance structure and its inability to provide an adequate water supply. As mentioned above, the sub-committee are also looking at tariffs which likely means an increase in price to end consumers.
The Minister noted the improvements being made to the electricity transmission and distribution system with 99% of the country now being served with a more reliable service.
An increase in electricity tariffs is also likely.
According to the Minister the government have launched a number of initiatives to make Trinidad and Tobago safer and secure.
These initiatives include:
The Minister made a number of significant announcements in respect of energy. These included:
All allocations to Tobago are focussed on enhancing tourism. A new terminal at the A.N.R. Robinson airport is scheduled to commence in July 2021, and two new fast ferries will soon arrive to service the sea link between Trinidad and Tobago.
Incentives will be introduced to stimulate innovation among small and medium sized enterprises (SME’s), and the Tobago Agribusiness Development Company is being formed to provide special incentives to farmers, and to develop the agro-processing sector in Tobago.
The 2021 allocation to Tobago amounts to TT$2.134 billion, of which TT$200 million is for capital expenditure. This represents 4.3% of the national budget.
The Minister sent a message to Tobagonians who clamour for greater independence and an increased say in their own future. The Self Government Bill for Tobago is to be accorded the highest propriety but passing that bill will require cross party support to proceed further.
The Minister noted that the success of the initiatives contained in the budget depend on the ability to contain the COVID-19 virus and the availability of a safe and effective vaccine.
Exceptional support and fiscal stimulus from GORTT will be required over the next two years to support the economy.
This support will be geared towards:
In common with previous budgets presented by this administration, the minister reiterated that diversification of the economy is central to the future development of Trinidad and Tobago.
Because GORTT’s revenue streams are constrained by low energy prices and stagnant economic activity as a result of COVID-19, most of these initiatives will be stimulated by providing the necessary incentives to the private sector.
Accordingly, GORTT plans to:
Estimates of revenue and expenditure will be based on an estimate of US$45 per barrel and US$3.00 per MMBtu for oil and gas respectively.
Based on these assumptions total revenue is estimated to be TT$41.364 billion an increase of TT$7.304 billion over the revised outturn for fiscal year 2020. TT$9.265 billion and TT$0.905 billion will come from oil revenue and capital revenue respectively with the balance coming from non-oil revenue sources.
Total expenditure is estimated to be TT$49.573 billion (a decrease of TT$1.258 billion over the 2020 outturn). Spending on capital programmes is not expected to be affected.
The fiscal deficit is expected to decrease to TT$8.209 billion representing 5.6% of GDP compared to TT$16.772 billion for the outturn of 2020 (this represented 11% of GDP).
To fund the deficit GORTT plans to tap the domestic and international capital markets and access facilities available at international institutions (mentioned in an earlier blog entry in this series).
The Minister announced a number of initiatives to promote the digitalisation of Trinidad and Tobago’s economy.
These initiatives include:
All of the above measure will take effect from 1st January 2021.
MIFI devices will be provided to 45,000 students based on need in order to provide them with access to the internet. The provision of Wi-Fi hotspots and internet cafes will be expanded in 2021 to remote areas.
The Minister announced a number of initiatives to promote property developments and to stimulate the housing market.
Increasing the rate of property development allowance from 15% to 20% of the capital expenditure incurred in the construction of commercial, industrial or multi-family residential buildings completed on or before 31st December 2024.
The TAUP scheme provides reimbursable grants to eligible tourism accommodation and will be expanded and extended. The extension will start on the 1st October 2020 and expire on the 30th September 2023.
With effect from the 1st January 2020 the rate of wear and tear on plant and equipment is increased from 25% to 30%.
Trinidad and Tobago as a country spends in the region of US$400 million per year importing on average 25,000 vehicles representing a serious – and in the Ministers view – unsustainable leak in foreign exchange.
To counter this leakage the Minister announced the removal of all tax concessions on the importation of private motor cars.
Concessions for customs duty, VAT and motor vehicle tax will remain for commercial and industrial vehicles.
In addition, the permissible age of foreign used cars imported into Trinidad and Tobago will be reduced to 3 years and the quotas for importing foreign used cars will be reduced by 30%.The removal of concessions and amendments to regulations will take place from the 20th October 2020.
Noting that to treat one cancer patient costs TT$500,000 per year, the Minister announced a number of measures to deter smoking.
The measures include:
These measures will take effect from the 20th October 2020.
With effect from the 1st January 2021, the VAT base is to be broadened to include imported luxury items including lobster, escargot, smoked salmon, clams, strawberries, champagne, apples and grapes.
YTEPP has partnered with the Commonwealth of Learning to make available a recovery programme that allows those who have lost their jobs or are in danger of losing their jobs to gain access to over 4,000 courses that would enable them to retrain to enter the job market.
This free scheme will commence on the 1st January 2021 and conclude in September 2021.
Effective from the 6th October 2020, GORTT are freezing the filing of all vacant posts in the public sector. This freezing will last for one year.
To promote access to equity funding for small and medium sized businesses, GORTT will amend the Corporation Tax Act from the 1st January 2021 to:
Effective from the 1st January 2021, the current tax allowance of TT$6 million will be increased to TT$12 million for corporate sponsorship of nationals operating in:
Effective from the 1st January 2021, the personal income tax allowance will increase from TT$72,000 to TT$84,000.
This measure is expected to put additional income of TT$3,000 per year into the pockets of 250,000 taxpayers at a cost of TT$750 million.
The aim of this provision is to stimulate the demand side of the economy via an increase in personal consumption.
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