The Trinidad and Tobago Chamber of Industry and Commerce (TTCIC) says it is encouraged by the TT$3.81 billion (One TT dollar=US$0.16 cents) supplementary appropriation bill tabled in Parliament this week, “as it would result in relief of financial pressure on businesses”.
The private sector group said the fiscal package may also provide a stimulus to the Trinidad and Tobago economy as a whole.
The government, anticipating a windfall of approximately five billion dollars from increased global prices for oil and gas, on Monday sought parliamentary approval for a TT$3.81 billion supplementary budget that it said will be used to finance outstanding payments across various sectors.
Finance Minister Colm Imbert, piloting the motion to adopt the Report of the Standing Finance Committee, told legislators that the additional money will be focused on paying the backlog of bills that has grown over the last several years because of simple inability to generate the revenue”.
Imbert said among the backlog is the allocation of TT$1.6 billion to repay money owed to businesses under the Value Added Tax (VAT) system,
“The Chamber has been advocating for VAT refunds to be made current for several years and we are pleased that TT$1.6 billion of the additional expenditure will go to an increase in payment of VAT refunds for the period April to September 2022,” the TTCIC said in a statement.
“We also note the Minister’s intention to settle outstanding payments to suppliers and contractors, as well as the payment of arrears to utility companies, and outstanding gratuities to public sector contract workers. These payments are expected to result in a much-needed stimulus to the economy.”
The chamber said the government’s outlook for a reduction in the budget deficit and a reduced overall public sector debt will provide for a reduction in the debt to gross domestic product (GDP) ratio, and improved sovereign ratings, which are favorable, as they will lead to increased borrowing flexibility.
Imbert told Parliament that Trinidad and Tobago’s gross domestic product (GDP) had also improved significantly with a total debt to GDP of TT$130 billion at the end of 2021 being 77 per cent and not the high 80 per cent as had originally been calculated.
“The nominal GDP in 2022 has continued to improve because of the increased cash flows. It is now estimated that our GDP is now TT$180 billion, which gives our current debt to GDP ratio, as of today, May 16, at 72 percent, making our debt to GDP ratio 15 percent less than estimated in the budget documents.
“This debt to GDP ratio of 72 percent is extremely manageable. This is one of the best GDP ratios in the world at this point in time,” he told legislators.
The chamber said while the country’s economy will benefit from the increased revenues in the immediate future, it is advocating “for continued tight management of expenditure and a focus on diversification for future economic sustainability.
“We underscore the need for close attention to be paid to the more vulnerable in society who would be affected by inflationary pressures brought on by current global circumstances,” the chamber added.
CMC/
