The budget for fiscal 2023 has been presented in the House of Representatives.
Finance Minister Colm Imbert proposed a wide range of incentives aimed at balancing economic recovery and providing relief to the average citizen.
See highlights from the Minister’s budget presentation below:
Total Revenue $ 56.175B (Based on assumption of US$92.50 per barrel, US$6 MMBTU Oil Price)
Oil revenue: $25.019B
Non-oil revenue: $30.150B
Capital Revenue: $1.066B
Projected deficit of $1.51B (0.8 per cent of GDP)
Education & Training $ 7.453B
National Security $5.798B
Social Grants $5.453B
Works and Transport $ 3.748B
Public Utilities $2.823B
Rural Development and Local Government $1.887B
Tobago: $ 2.521B
1. Personal Income Tax allowance – Government is increasing the exemption on the personal income tax limit from $84,000 to $90,000 per year. This means people earning a monthly salary of $7,000 or less will be exempt from income tax. This is the third time that Government has increased this allowance, representing an extra $1,500 of disposable income per year in the pockets of 300,000 taxpayers. Will take effect on January 1, 2023.
2. Fuel prices adjusted – premium and super fuels increased by $1 ($7.75 and 6.97 respectively), while diesel is subject to a 50 cent hike ($4.41). The price of cooking gas remains fixed at $21 for 20lb gas cylinders.
3. VAT registration threshold to be increased from $500,000 per year to $600,000 to provide relief and support in the payment of VAT, to benefit the Small and Medium Enterprise Sector, in particular. This fiscal measure will take effect from January 1, 2023.
4. Rebates of up to $25,000 for the implementation of renewable energy (wind, solar) in agriculture. This will be administered by the Minister of Agriculture and will take effect on January 1, 2023.
5. A one-time manufacturing tax credit (up to maximum $50,000) for companies which invest in new machinery, production lines. This measure will require amendments to the Corporation Tax Act and come into effect on January 1, 2023.
6. Increase in investment tax credit for energy companies from 25 per cent to 30 per cent to stimulate exploration and development related investments in the energy sector. The Petroleum Taxes Act will have to be amended, and the measure will take effect January 1, 2023.
7. $210 million has been allocated for healthcare workers for the purpose of ex-gratia payments to 20,000 health workers for their work throughout the pandemic.
8. Construction of a 112-Megawatt Solar Photovoltaic project is expected to begin in early 2023.
The US$124 million project is at an advanced stage of negotiation with a consortium of Lightsource Renewable Global Development Limited, Shell Trinidad and Tobago Limited, and BP Alternative Energy Trinidad and Tobago Limited. The project forms part of Government’s policy goal for including renewable energy in the electricity supply mix.
9. Revenue collection from the Gambling Control Commission is expected to commence in 2023.
10. The Trinidad and Tobago Revenue Authority (TTRA) is expected to become operational in 2023, with an improved revenue administration combining the operations of the Inland Revenue Division and the Customs and Excise Division. With 325,296 returns of property data, the Valuations Division is on track to commence collection of property tax in Fiscal 2023.
11. Salary negotiations – Government is sticking to its offer of a four per cent increase for public servants, which represents $4.3 billion in backpay. The Finance Minister said Government will have to dig deep but is committed to making these payments.
“Anything beyond four per cent will wreck the economy,” he said.
12. Utilities – Focus is being placed on increasing the reliability of the delivery of water by desilting reservoirs. Additional booster stations and expansion and rehabilitation of wastewater infrastructure will support further, improved production.
13. Agro-processing – The grant funding facility for wheat alternative flour producers has been increased from $250,000 to $340,000.
14. Housing – Significant financial resources are being allocated to the Housing Development Corporation (HDC) to refocus its mandate to construct affordable housing units. Three Government-guaranteed loans totalling $1.5 billion are being arranged: $500 million will fund the completion of stalled or existing housing projects; another $500 million will be used for the payments of debts owed to contractors and suppliers and a further $500 million will be used for the construction of new housing units.
15. Cashless transactions – The Ministry of Trade and Industry’s Single Electronic Window is being updated to offer online payment options for over 300,000 annual transactions for a wide range of services.
Work on the implementation of financial instructions to leverage the platforms of Payment Service Providers is also ongoing, to provide services for the underbanked and unbanked to be able to do business with the Government via a combined agent network of over 1,500 agents across Trinidad and Tobago.
The Minister explained: “This will allow for greater reach to citizens and offer a convenient approach for persons who still transact in cash and who do not have a bank account, reducing the hassle for citizens in rural communities who must commute to Government offices to make payments for various services.” This method of payment is expected to be implemented early in 2023.
16. SMEs – Through funding in the amount of $500 million and in partnership with the commercial banks, Government will introduce a new Long-Term Loan Guarantee Scheme for Small and Medium enterprises.
First Citizens Bank will manage this project in collaboration with other commercial banks. The Government loan guarantees will be for up to 80 per cent of the value of the loans, for a term of up to 10 years, inclusive of a 2-year moratorium on repayments and will focus on the non-energy sector.
17. GATE: The criteria for accessing GATE has been adjusted to permit students in good standing enrolled in institutions and programmes accredited by the Accreditation Council of Trinidad and Tobago to qualify for GATE; if they have completed an initial programme of study, such as a diploma or associate degree or the N1 level at UWI and they wish to upgrade to a bachelor’s degree.
Similarly, students pursuing Technical and Vocational Education Training (TVET) programmes who have already accessed GATE for lower level TVET qualifications will now qualify for GATE for level 4 and level 5 programmes that lead to an advanced diploma or bachelor’s degree.
18. Education- a structured remedial education programme is being introduced to assist those students who have fallen behind because of COVID-19, to recover and catch up with their learning. An allocation of $50 million has been made for this purpose.
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