Month: September 2016

T&T’s 2016 Budget – A Blueprint for Transformation and Growth?

In Greek mythology, a phoenix is a long-lived bird that is cyclically regenerated or reborn. As the mythical phoenix periodically rises from the ashes, so does Trinidad and Tobago’s traditionally energy sector dependent economy cyclically rise from seasons of economic despair. However, in this current season of low oil prices, high unemployment, and against the background of a devaluing currency, has the Minister of Finance in his 30th September 2016 Budget document unveiled an alternate source of fuel that can propel the T&T Phoenix upward?

On September 30, 2016, the Minister of Finance released his Budget Document optimistically entitled “Shaping a Brighter Future – A Blueprint for Transformation and Growth“.

The following is a summary of the proposed fiscal measures:

Subject Proposed Measure Proposed Date of Implementation
Value Added Taxes Foreign yacht repair services will be a VAT Exempt service for yacht owners. First Quarter of 2017
Revenue Authority Establish an independent body referred to as the Revenue Authority that will administer both taxation and customs. The new institution will be supervised by an independent board. Fiscal Year 2017
Transfer Pricing To develop policy and legislation to govern transfer pricing in T&T. None
Property Tax To be implemented based on the Property Tax Act 2009, with minor amendments to the Valuation of Land Act. Fiscal Year 2017
Gaming Re-Introduce the Gambling (Gaming and Betting) Control Bill. All forms of betting and gaming activities placed under a comprehensive regulatory framework. None
Fuel Subsidy To continue the incremental removal of the fuel subsidy and to increase the price of diesel by 15%. New price of diesel fuel will be $2.30 per litre, up from $1.98 per litre Immediately
Alcohol and Tobacco • increase the excise duty on locally-manufactured tobacco products by 15 percent as well as on alcoholic products by 20 percent; and
• increase the customs duty on imported tobacco and alcoholic products from the Common Market Origin will be increased by 15 percent and 20 percent respectively;
• increase the customs duty payable on alcoholic beverages and tobacco products imported into Trinidad and Tobago from extra-regional sources.		 October 20, 2016
New Tax Bracket for High Income Individuals and Companies Introduction of a new tax bracket of 30% on high income individuals whose chargeable income exceeds $1 million per annum and on companies with chargeable profits also in excess of $1 million per annum. January 1, 2017
Tax on On-line Purchases 7% charge on purchases that arrive in T&T through courier companies or are brought in directly by individuals via air freight. The tax will be due and payable at the bonded warehouses before clearance of goods or directly to customs in the same way that VAT and customs duty are currently collected. October 20, 2016
Agro-Processing Tax Relief All approved agro-processing operations will be tax free. In order to be “approved” the qualifying criteria is that at least 75% of the processing of agricultural products must be done in T&T and 75% of the ingredients must be produced or harvested locally. Second Quarter of Fiscal Year 2017
Public Private Partnership (PPP) Business Tax relief a 50% tax relief and other fiscal incentives to businesses which can mobilize private sector funding to provide public infrastructure and/or public facilities, amenities and services. Projects that increase productivity and create meaningful employment will also be considered for inclusion. First half of Fiscal Year 2017

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Read Full Budget Document here:

budget-statement-2017-for-web

DISCUSSION FORUM

Does the Budget prescribe the panacea that will alleviate the problems and elevate the T&T economy to renewed heights? Please leave your comments in the box below.

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One More Barbados Tax Amnesty – Update

This is an update to our post initially published on 21 August 2016.

Specifically, during the 2016/2017 Barbados Financial Statements and Budgetary Proposals, the Minister of Finance proposed that the Government will again offer a tax amnesty which will run from 15 September 2016 to 15 February 2017. Subsequently, the Barbados Revenue Authority has issued a Policy Note which provides details on the operation of the Tax Amnesty. Posted by La-Tanya Edwards

During the 2016/2017 Barbados Financial Statements and Budgetary Proposals, the Minister of Finance proposed that the Government would again offer a tax amnesty which would run from 15 September 2016 to 15 February 2017.

The Minister emphasized that this is expected to be the last tax amnesty offered by his Government for a while.

The amnesty covers outstanding amounts due in respect of:

•     Income Tax;

•     Value Added Tax; and

•     Land Tax.

The waiver is applicable to penalties, interest and other charges incurred up to 14 September 2016.  In order to benefit, a taxpayer must inter alia settle the outstanding tax on or before 15 February 2017.  The Barbados Revenue Authority has issued the following Policy Note which provides details on the operation of the amnesty:

policy-note-2016-no-07-tax-amnesty

(download PDF here)

This amnesty is expected to collect approximately BD$15 million which is a small fraction of the BD$568 million in outstanding taxes referenced by the Minister.

DISCUSSION FORUM

In these challenging economic times, are tax amnesties like this one (and the recent one in T&T) the answer? Please leave your comments in the box below.