The Trinidad and Tobago government on Wednesday presented a TT$3.14 billion supplemental budget to Parliament, aiming to revive an economy it described as left in a “dire” state by the previous People’s National Movement (PNM) administration.
Finance Minister Davendranath Tancoo highlighted the signs of economic decline, noting that “the vast majority of the middle class had been thrown into poverty.” He added that over 60,000 businesses had been struck off the register, and 6,000 more, many micro and small enterprises, were forced to close, “crippling the domestic small investment class.”
The mid-year budget review seeks approval for amendments to the Appropriation Act 2025. Tancoo said the government was forced to seek supplementary funding “not because of unforeseen crises, but because the former government intentionally underbudgeted for critical expenditure, knowing full well that the bills would come due.”
He explained that although the projected fiscal deficit for the first half of the fiscal year was TT$3.97 billion, the actual deficit was TT$3.44 billion—a figure “deceptive” due to expenditure cuts causing arrears the current government must now pay.
Revenue fell short by TT$485.5 million, which Tancoo attributed to “under-resourcing of the one entity engaged in tax collection, the Board of Inland Revenue.” Expenditure was also reduced by TT$1.01 billion during this period.
The supplemental budget includes TT$2.8 billion for recurrent expenditure and TT$278.9 million for development projects. These funds are needed largely to address the previous government’s underbudgeting and unmet obligations.
Tancoo also outlined revised projections, with oil prices expected at US$66 per barrel and natural gas at US$5 per MMBtu, resulting in a projected overall deficit of TT$9.67 billion. He said the government plans to fund this through borrowings and multilateral facilities, while improving revenue mobilization and pursuing efficiency measures.
Highlighting policy reforms, Tancoo noted the repeal of the Trinidad and Tobago Revenue Authority (TTRA) Act and the Property Tax Act, and a feasibility study on reopening the state-owned PETROTRIN refinery, which was closed in 2018.
Key priorities include transfer pricing legislation to align with international tax standards and efforts to remove Trinidad and Tobago from the EU’s list of non-cooperative tax jurisdictions.
The government plans to reform the business levy and broaden tax incentives for research and development beyond manufacturing. A “top-up tax” may be introduced for multinational companies paying below 15% effective tax.
On foreign exchange, a Foreign Exchange Allocation Committee will be established to bring transparency and equity. Reporting requirements for high-volume importers will be introduced, and investor confidence bolstered through enhanced profit repatriation protocols and investment protections.
Tancoo also mentioned exploring foreign currency tax exemptions, reviewing bilateral tax treaties, and advancing regional tax harmonization with CARICOM partners.
Additional initiatives include an Export Allowance and Export Growth Incentive targeting non-CARICOM markets and priority sectors, alongside a proposed Export Proceeds Retention Facility to help exporters reinvest earnings.
Describing previous economic policies as “economic sabotage,” Tancoo called the government’s task “challenging” but underscored efforts already underway.
He also announced a forthcoming US$15 million loan from the Caribbean Development Bank for coastal protection projects in Tobago.
