A $49.573 billion budget has been presented by Finance Minister Colm Imbert, with the largest chunks going to Education and Training, Health and National Security.
Themed “Resetting the economy for growth and innovation”, the package is pegged on an oil price of US $45 per barrel and a gas price of US $3 per mmbtu.
Total revenue is expected to be $41.364 billion which will result in a deficit of $8.209 billion, or 5% of GDP.
The major allocations as outlined by the Minister are as follows:
• Education and Training: $7.973 billion
• Health: $6.050 billion
• National Security: $5.227 billion
• Works and Transport: $2.956 billion
• Public Utilities: $2.091 billion
• Rural Development and Local Government: $1.642 billion
• Agriculture: $1.198 billion
• Housing: $1 billion
• Tobago – $2.134 billion
LIQUID PETROLEUM PRODUCTS AND PROPERTY TAX
Among the major announcements was the removal of fixed retail margins for all liquid petroleum products.
According to the Finance Minister, petroleum retailers and dealers will be allowed to fix their own margins.
This is targeted for introduction in January 2021.
Wholesale margins however will remain fixed for the time being.
He also announced that all gas stations owned by NP will be offered for sale to private dealers, with priority given to be given to existing dealers and concessionaires.
On the matter of the property tax, he confirmed again that this tax regime will come into effect in financial year 2021, starting with residential properties.
He claims however that the tax will be fair and reasonable.
- A $500m agriculture stimulus package for the agricultural sector, which will be in addition to its budgetary allocation.
- An increase in the exemption limit for personal income tax allowance, to $84,000 per year. According to the Minister, this means persons earning $7,000 a month or less will now be exempt from income tax, putting an additional $3,000 per year into the pockets of over 250,000 taxpayers.
- There will be a 200% increase in all penalties for the selling of tobacco and alcohol to minors.
- From January 1st 2021, 12.5% VAT will be applied to a wide range of imported luxury items including lobster, champagne, apples and grapes. A full list will be made available.
- An Internet MiFi program. Mobile hotspots will be given to 45,000 students based on need in order to provide connectivity. Roll out expected in first quarter of 2021.
- $50m has also been allocated for the acquisition of computers for needy students. Mr Imbert says they will be distributed to those who really need them.
- There is a proposal to remove all tax concessions on private motor cars. All private motor cars will now attract customs duty, motor vehicle tax and VAT with the lowest tax rates on hybrid, electric, CNG and small engine cars (under 1500cc). Tax concessions will remain in place for commercial and industrial vehicles and public transport vehicles. Measures to take effect on October 20th 2020.
- Waiver of stamp duty for first time homeowners. There will be an adjustment in the threshold for first time homeowners from $1.5m to $2m.
- Government will also freeze in the filling of all vacancies in the public sector for the time being.
- The salary relief and income support grants will be extended to December 2020 for workers in the creative and cultural industries, since these will be among the last to reopen with the current COVID-19 pandemic.
The Minister also made a revelation regarding the Point-a-Pierre Refinery.
Mr Imbert says Government’s deadline for finalizing the deal with Patriotic Energies Ltd is October 31st 2020, after which, other options will be explored.
The Budget debate will begin on Friday, beginning with the Opposition Leader’s official response to the fiscal package.