Trinidad and Tobago Prime Minister Kamla Persad-Bissessar has announced that the Government will move to exempt pension payments and approved deferred annuity income from income tax, describing the measure as a key reform aimed at improving financial security for retirees.
Speaking in the House of Representatives on Friday afternoon, Persad-Bissessar said the proposal will be included in the upcoming Finance Bill, 2026, as part of a wider effort to reduce the cost of living and deliver on campaign commitments.
The exemption will apply to income received from approved pension fund plans and approved deferred annuity plans under the Income Tax Act, Chapter 75:01.
“This Government was elected on a clear promise: to put people first, to ease the burden on working families and to ensure that after a lifetime of contribution, our citizens can retire with dignity and peace of mind,” she said.
Under the proposed policy, pension income from approved schemes will be exempt from income tax effective January 1, 2026, covering both existing and future qualifying plans.
The Prime Minister said the reform is intended to reward long-term savings and ensure retirees retain more of their retirement income.
“A pension is not a windfall. It is not a bonus. It is the result of years, sometimes decades, of sacrifice, discipline and commitment,” she said. “This Government believes that such responsibility should be rewarded, not penalised.”
Persad-Bissessar added that the measure is expected to benefit thousands of citizens, particularly middle-income earners who rely on pensions and annuities as their main source of retirement income.
Citing tax data, she said more than 39,000 taxpayers claimed annuity contributions in the 2024 income year, though most were modest savers.
The Government also confirmed that early withdrawals from pension or annuity plans will remain taxable, in an effort to prevent misuse of the exemption.
“We are ensuring that the system remains fair, balanced and sustainable,” she said, stressing that the reform is not designed as a tax avoidance mechanism.
The Prime Minister said the proposal reflects a key election pledge and forms part of the administration’s broader fiscal agenda.
“This is what accountable governance looks like,” she said. “We believe that trust is earned through action.”
The Finance Bill, 2026, which will include the proposed amendment, is expected to be laid before Parliament before the end of the current session.
