2027 Budget sets out wide-ranging fiscal measures

Gail Alexan­der

Se­nior Po­lit­i­cal Re­porter

The 2027 Bud­get in­cludes a range of mea­sures tar­get­ing tax com­pli­ance, in­vest­ment, ed­u­ca­tion, so­cial sup­port and busi­ness de­vel­op­ment, along­side changes to Na­tion­al In­sur­ance, VAT and cus­toms penal­ties.

Here are some of the key fis­cal mea­sures, in­vest­ment pro­pos­als and so­cial ini­tia­tives out­lined in the Bud­get

OTH­ER FIS­CAL MEA­SURES

* Pro­posed Na­tion­al In­sur­ance leg­is­la­tion for ap­pro­pri­ate pro­vi­sions for work­ers who were un­fair­ly de­nied ben­e­fits as a re­sult of COVID-19 shut­downs.

* Re­view of Na­tion­al In­sur­ance claims and ap­peals sys­tem where there are over 1,000 un­re­solved mat­ters in­clud­ing from pen­sion­ers, per­sons with dis­abil­i­ties and work­ers seek­ing ben­e­fits to which they may be le­git­i­mate­ly en­ti­tled.

* Tax­pay­ers must un­der­take manda­to­ry elec­tron­ic fil­ing through In­land Rev­enue Di­vi­sion’s GEN­TAX sys­tem.

* In­creased penal­ties for false de­c­la­ra­tions un­der the Cus­toms Act from $125,000 to $250,000.

* In­creased Penal­ty for em­ploy­ers' non-pay­ment of Na­tion­al In­sur­ance Con­tri­bu­tions from a max­i­mum fine, mov­ing from $4,000 to $8,000.

* Mod­ern Elec­tron­ic Pass­port Is­su­ing Con­trol Sys­tem in Jan­u­ary 2027.

* Pro­posed law for en­force­able code of ethics, strength­en the li­cens­ing regime, re­struc­ture the Cus­toms Bro­kers and Cus­toms Clerks Board, up­date of­fences and penal­ties, and re­vise ap­plic­a­ble fees.

IN­VEST­MENTS

* To im­prove ease of busi­ness – pro­posed For­eign In­vest­ment law sim­pli­fy­ing rules for for­eign ac­qui­si­tion of land and shares, in­clud­ing trans­ac­tions up to US$100,000. Cari­com na­tion­als will be ex­empt from the con­sid­er­a­tion rule.

* Launch of Gov­ern­ment Sav­ings Bond Pro­gramme for in­di­vid­u­als and small savers, al­low­ing for in­vest­ing $1,000, $5,000, $10,000 or more. Bonds will be of­fered at a fixed rate of in­ter­est in TT and US dol­lars

* In­tro­duc­tion of a Re­tail Gov­ern­ment Se­cu­ri­ties Pro­gramme plac­ing Gov­ern­ment bonds with­in cit­i­zens' reach, of­fer­ing se­cu­ri­ties in small­er de­nom­i­na­tions, in­clud­ing in­vest­ments from $5,000. This tar­gets teach­ers, nurs­es, young pro­fes­sion­als, small busi­ness own­ers, pen­sion­ers and first-time in­vestors.

* Im­prov­ing ad­min­is­tra­tion of the For­eign Ex­change regime with pro­posed Ex­change Con­trol law clar­i­fy­ing ex­ist­ing arrange­ments gov­ern­ing im­por­ta­tion/ex­por­ta­tion of for­eign cur­ren­cy notes.

* In­ter­na­tion­al part­ner to con­duct a di­ag­nos­tic on the Gov­ern­ment Lo­cal Cur­ren­cy Bond Mar­ket, fol­low­ing which a re­form plan will be in­cor­po­rat­ed in­to the Fi­nance Min­istry's cash and debt man­age­ment frame­work.

* NIF 3 be­ing launched in the com­ing months.

TAX MAT­TERS

* In­tro­duc­tion of a lim­it on car­ried-for­ward loss­es for gen­er­al trade and busi­ness. Cur­rent­ly, busi­ness­es may car­ry for­ward ac­cu­mu­lat­ed loss­es to re­duce tax­able prof­its in sub­se­quent years. Gov­ern­ment will lim­it util­i­sa­tion of car­ried-for­ward loss­es for all busi­ness­es to 75 per cent of charge­able prof­its in any in­come year.

* New Reg­is­tra­tion of Clubs law for pay­ing tax­es quar­ter­ly rather than an­nu­al­ly.

* In­crease in Un­em­ploy­ment Levy on tax­able prof­its of pe­tro­le­um com­pa­nies from five to eight per cent.

* In­crease in with­hold­ing tax on dis­tri­b­u­tions made to non-res­i­dent in­di­vid­u­als and com­pa­nies from eight to ten per cent, while the rate on dis­tri­b­u­tions to non-res­i­dent par­ent com­pa­nies will in­crease from three to five per cent.

* Pro­posed In­come Tax law clar­i­fy­ing cir­cum­stances in which pay­ments for man­age­ment, tech­ni­cal and oth­er pre­scribed ser­vices to non-res­i­dents will be treat­ed for with­hold­ing tax pur­pos­es.

* Ap­pli­ca­tion of VAT to dig­i­tal ser­vices sup­plied by non-res­i­dent providers to per­sons in T&T.

* Dis­al­low­ing de­duc­tions for ex­pens­es in­curred in earn­ing ex­empt in­come.

VAT

* Preser­va­tion of a ze­ro-rat­ing on se­lect­ed ba­sic es­sen­tial items, while mov­ing se­lect­ed items from ze­ro-rat­ed to VAT-ex­empt sta­tus. Goods will con­tin­ue to at­tract no VAT at the point of sale.

* In­ter­na­tion­al mul­ti­lat­er­al part­ners con­duct­ed a com­pre­hen­sive di­ag­nos­tic re­view of the VAT sys­tem and as­sessed the suit­abil­i­ty of a Sales Tax. The re­view rec­om­mend­ed that a re­formed and mod­ernised VAT sys­tem is the more ap­pro­pri­ate con­sump­tion tax for T&T. Key rec­om­men­da­tions were ac­cept­ed, and cor­rec­tions are be­ing im­ple­ment­ed to the VAT sys­tem.

* En­ti­ties that don't meet the re­quire­ments for VAT reg­is­tra­tion will there­fore be un­reg­is­tered. Those mak­ing tax­able sup­plies will con­tin­ue to be as­sessed in ac­cor­dance with the VAT Act.

* $100 fee for is­suance of a VAT Clear­ance Cer­tifi­cate.

* $100 penal­ty for every two months a VAT re­turn re­mains out­stand­ing.

CARE, ED­U­CA­TION

* In­creased home con­struc­tion ac­tiv­i­ty via com­bined Pub­lic-Pri­vate Part­ner­ships and State-fund­ed projects.

* Na­tion­al Care and Sup­port Pro­gramme com­pris­ing home care for old­er per­sons, in­clud­ing those with dis­abil­i­ties or re­quir­ing tem­po­rary/short-term as­sis­tance.

* Ad­vanc­ing work on pro­posed Parental Re­spon­si­bil­i­ty law, re­in­forc­ing that ed­u­ca­tion and nur­tur­ing are shared re­spon­si­bil­i­ties among home, school and State.

* Af­ter-School Study Cen­tres for Stan­dard One to Form Three stu­dents in 100 schools: 65 pri­ma­ry and 35 sec­ondary schools.

* Ar­ti­fi­cial In­tel­li­gence in Ed­u­ca­tion Pro­gramme.

* Sail Clear ar­rival and de­par­ture dig­i­tal clear­ance sys­tem, re­duc­ing yacht pro­cess­ing times from four hours to 15 min­utes.

* 100-room Hamp­ton by Hilton at Pi­ar­co, set to open March 2027; 109-room Hilton Gar­den Inn at South Park, tar­get­ed com­ple­tion March 2028.

* Un­der con­sid­er­a­tion - Pover­ty Re­duc­tion Strat­e­gy – strength­en­ing sup­port dur­ing the ear­li­est years of a child's life; strength­ened school nu­tri­tion; bet­ter ac­cess to wa­ter for vul­ner­a­ble house­holds; more as­sis­tance for new­borns' par­ents.

* Start of In­te­grat­ed Ex­pan­sion of Tech­ni­cal and Vo­ca­tion­al Ed­u­ca­tion in Sec­ondary Schools.

* The ‘READY’ In­tern­ship Pro­gramme for 1,300 sec­ondary school stu­dents with struc­tured work ex­pe­ri­ence dur­ing the Ju­ly-Au­gust 2027 va­ca­tion with a $1,500 stipend.

* Reg­u­la­tions for im­por­ta­tion, reg­is­tra­tion and use of Clas­sic, An­tique and Vin­tage mo­tor ve­hi­cles, in­clud­ing im­port con­trols and dif­fer­en­ti­at­ed rates of Mo­tor Ve­hi­cle Tax. The rate of Mo­tor Ve­hi­cle Tax will in­crease by 100 per cent for Clas­sic ve­hi­cles, 50 per cent for An­tique ve­hi­cles and 25 per cent for Vin­tage ve­hi­cles.

* Farm Busi­ness For­mal­i­sa­tion Pro­gramme as­sist­ing reg­is­tered farm­ers to strength­en busi­ness­es.