Budget 2021 – LIVE BLOG

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    2021 BUDGET PRESENTATION BY FINANCE MINISTER COLM IMBERT

    5:15PM – The income tax exemption limit will be increased from $72,000 to $84,000 per year. According to the Minister this means that persons earning $7,000 a month or less will now be exempt from income tax. He says this will put additional income of $3,000 per year into the pockets of over 250,000 taxpayers.
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    5:10PM – 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.
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    There will be a 200% increase in all penalties for the selling of tobacco and alcohol to minors.
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    VAT will be restored to original conceptualization. From January 1st 2021, 12.5% VAT will be applied to a wide range of imported luxury items including champagne, apples and grapes. A full list will be made available.


    5PM – 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.
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    Waiver of stamp duty. There will be an adjustment in the threshold for first time homeowners from $1.5m to $2m.
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    Fines for illegal quarrying will be increased by 200% from January 1st 2021.


    4:50PM – The minister says the oil assumption of budget 2021 is US$45 a barrel and gas prices of US$3 per mmbtu. Total revenue is forecast at $41.364B while total expenditure is pegged at 49.573B. The minister calls it a substantial reduction in expenditure. The deficit is set at $8.209B.
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    MAJOR ALLOCATIONS AS ANNOUNCED BY THE MINISTER:
    Education and Training: $7.973B
    Health: $6.050B
    National Security: $5.227B
    Works and Transport: $2.956B
    Public Utilities: $2.091B
    Rural Development and Local Government: $1.642B
    Agriculture: $1.198B
    Housing: $1B
    Tobago: $2.134B


    4:45PM
    He also announced that all gas stations owned by NP will be offered up for sale to private dealers, with priority to be given to existing dealers.
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    The Minister says the fixed retail margins for all liquid petroleum products will be removed. 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.


    4:30PM – The minister says Government will work with Tobago House of Assembly to implement a suite of social and economic measures to help the island cope with COVID-19.
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    Government expects to take control of the new passenger ferry, APT James, before the end of October 2020. The ferry which can transport 920 passengers and 250 cars, will make the trip to Tobago in less than three hours. It is expected to be put into operation by the end December 2020.
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    For fiscal 2021, the budgetary allocation for the THA is 2.134 billion.


    4:10PM – Heritage Petroleum is in the process of concluding a deal with Patriotic Energies. However, there is a October 31st 2020 deadline. If a deal is not made by that time, Government will consider other options for the refinery.
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    Natural gas reserves have remained relatively stable according to Ryder-Scott. The average output is currently at 3.2 csf per day and remain around that figure in 2021.
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    Looking to implement renewable energy and electric power.


    4PM – The Minister says sustainable water supply is a top priority. This is key to fighting COVID-19. He says the generation of electricity is more or less satisfactory with 99% of the country being served.
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    He says government remains committed to the fight against crime. Measures have been put in place including the National Operations Fusion Centre and intelligence centered operations.
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    There will be a new police headquarters while moves will be made to bring the TTPS up to full capacity in four years.


    3:50PM – The minister says $50m has been provided to for the acquisition of computers for needy students. He assures they will be distributed to those who really need them.
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    Housing: Number of applicants remains substantial. HDC is rolling out about 3,000 units yearly. He says over the next 10 years, 25,000 new homes will be given out on state lands for persons of different incomes.
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    Ministry of Finance will facilitate a $1B guaranteed loan facility for HDC in 2021.


    3:40PM – Creative and cultural industries are emerging as a critical engine of growth. He says this sector will be among the last to reopen. He notes artistes are receiving and can receive support. The salary relief and income support grants will be extended to December 2020 for workers in this industry.
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    The minister says the social safety net was expanded in 2020 due to COVID-19. He notes that 200,000 persons have benefited from social services.


    3:20PM – The Minister says domestic food supply is a top priority. Government aims to make the sector more attractive for young people. A $500m agriculture stimulus package will be given in addition to the sector’s budgetary allocation. The minister assures that land issues will be addressed.
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    Manufacturing will remain remain private sector driven but Government will support in the drive to double output by 2024. He says the vision, post-pandemic, is to have it globally competitive. Among the measures being sought is improving the ease of doing business. He says the VAT refund system will also be made more efficient.
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    He says among the areas to be looked at in the future is medical marijuana.


    3:10PM – The Revenue Authority should be established already, says the minister. He says he is looking forward to opposition support.
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    He believes a gaming commission should be established. He says an unregulated gaming industry cannot be allowed to continue as it is and is again hoping for opposition support.
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    The Minister says they will look to extend the retirement age to 65.
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    Minister Imbert also announces a freeze in the filling of all vacancies in the public sector.


    3PM – The minister says the theme for the budget is “Resetting the economy for growth and innovation.” He says T&T must strive against the virus beyond political differences.
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    The Finance Minister confirms that there will be the commencement of the property tax regime in financial year 2021 starting with with residential properties. He claims the tax will be fair and reasonable. It will be governed by two pieces of legislation.
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    He says inflation is likely to continue at very low levels up until 2022.
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    The minister also defends Government’s borrowing, saying it will avoid a bigger loss of jobs which could damage the economy in the long run.
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    He says once the economy recovers, the debt to GDP ratio could recover to pre-COVID levels of 65% by 2023/2024.
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    Minister Imbert notes that boosting jobs is important moving forward and aims to return unemployment rate to 4-5%.


    2:40PM – The minister says by early 2020, the fiscal contraction of the past had declined. The fiscal deficit was being “systematically” reduced. He claims if everything remained on track, there would have been sustainable growth by 2021.
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    Turning to COVID-19, the Minister thanks healthcare workers for helping contain the virus. He says the health sector continues to be provided with resources, noting that debilitating effects of the pandemic on the economy. He notes that T&T has had to close borders which has seen serious economic effects.
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    With the collapse of oil and gas revenues and with the advent of COVID-19, there is a forecast deficit of $16.8 billion deficit for fiscal 2020.