分类： business

In a significant move aimed at streamlining taxation and boosting economic efficiency, Trinidad and Tobago’s Finance Minister Davendranath Tancoo announced plans to replace the existing Value Added Tax (VAT) system with a sales tax during the 2025/2026 budget presentation on October 13. The VAT system, in place since 1989, has been criticized for its administrative complexity, backlog of refunds, and negative impact on business confidence. Tancoo emphasized that the proposed sales tax system would be simpler, more efficient, and aligned with models used in countries like the US and Canada. The current VAT rate stands at 12.5%, but the new system aims to eliminate loopholes and improve compliance through better resource allocation and digitization. Additionally, the government announced the removal of VAT on ‘basic’ food items, effective October 17, to address national food affordability. This includes products like pumpkin, watermelon, and coconut water. Industry leaders, including the TT Manufacturers’ Association and the Supermarket Association, have expressed cautious optimism, highlighting potential benefits such as reduced administrative burdens and improved cash flow for businesses. However, concerns remain about the transition process, particularly for small enterprises and farmers, who may face challenges in adapting to the new system. The government has pledged to ensure the transition is revenue-neutral and socially balanced, with protections for low-income households.

In a landmark announcement during the 2025/2026 national budget presentation, Finance Minister Davendranath Tancoo unveiled sweeping reforms to the National Insurance System (NIS). These changes, aimed at ensuring the long-term sustainability of the system, include a phased increase in contribution rates and a gradual rise in the qualifying age for full pension benefits from 60 to 65 years, effective January 2028. These measures, though initially surprising to some, were deemed both inevitable and necessary following the 11th Actuarial Review, which warned that the National Insurance Board’s (NIB) reserves could be depleted within eight years without decisive action. The reforms reflect global demographic trends, including aging populations, declining birth rates, and a shrinking workforce, which are placing immense pressure on social security systems worldwide. Minister Tancoo reassured citizens that those retiring before January 1, 2028, will remain unaffected, and existing pensioners will continue to receive their full entitlements, including the minimum pension at age 60. These reforms have been welcomed by financial professionals as a demonstration of fiscal responsibility and a commitment to long-term sustainability. Similar measures have been adopted globally, with countries like Denmark, France, the United Kingdom, and Barbados adjusting their retirement ages to align with demographic shifts. While these changes may be challenging, they are essential to preserving the integrity of the NIS, which supports over 200,000 citizens in securing income and dignity during retirement. By acting now, the government aims to safeguard the financial well-being of the nation and ensure future generations benefit from a stable and reliable safety net.

As Trinidad and Tobago (TT) adapts to a rapidly evolving global energy landscape, the nation is charting a bold new course. At the forefront of this transformation is a strategic pivot toward large-scale wind energy deployment, coupled with green hydrogen and green ammonia production. This initiative is poised to become TT’s next major economic driver, ensuring its competitiveness in a world increasingly focused on decarbonization.

For entrepreneurs and senior-level employees in Trinidad and Tobago’s small and medium-sized enterprises (SMEs), achieving export readiness is a significant milestone. The Trinidad and Tobago Chamber of Commerce (TT Chamber) has long emphasized this goal through its Contact Magazine and various initiatives, offering incentives, support services, and financing options to help businesses scale from micro to large enterprises. Both public and private sectors have introduced technical and operational growth programs, including the TT Chamber’s inaugural SME Conference, ‘Catalyst,’ aimed at fostering SME development. However, while some SMEs have achieved remarkable regional and international success, many still struggle to break through. This raises critical questions about policy environments, financing accessibility, and the effectiveness of public and private support systems. Marc Sandy, Manager of the Trade & Business Development Unit at the TT Chamber, highlights that while these factors are important, the entrepreneur’s passion and commitment to building a sustainable brand are paramount. One standout example is Farm and Function, a local agro-processing company that has expanded its regional footprint despite challenges, including the COVID-19 pandemic. Founded by David Thomas and Rachel Renie-Gonsalves, the company evolved from d’Market Movers, an online fresh produce distributor, into a leading supplier of frozen fruits. Farm and Function’s success story underscores the importance of resilience, strategic pivoting, and a clear vision. As SMEs navigate the complexities of export readiness, they must ask themselves fundamental questions about their ambitions, adaptability, and discipline. The journey from local to legendary demands not only financial and operational readiness but also an unwavering commitment to a global vision.

In a groundbreaking move, Trinidad and Tobago’s Finance Minister Davendranath Tancoo has announced a review of the Value Added Tax (VAT) regime, with plans to potentially replace it with a sales tax. This marks a significant departure from the fiscal landscape, where VAT has been a cornerstone since its introduction in 1989. The proposed shift aims to simplify the tax system, ensure revenue preservation, and promote equity, particularly for low-income households. However, the transition requires meticulous planning, including legal amendments, administrative restructuring, and IT reconfiguration, which will take considerable time. The budget also includes measures to make certain food items zero-rated, acknowledging that VAT will remain in place for the foreseeable future. The current VAT system has been a major revenue generator, contributing $6.6 billion in 2023, $9.5 billion in 2024, and an estimated $8.3 billion in 2025. These figures highlight the importance of careful implementation to avoid replacing one set of challenges with another. The idea of a sales tax is not new; it was first considered in the 1980s but was shelved due to administrative complexities. While businesses historically favored VAT, the proposed review signals a recognition of the need to address systemic inefficiencies, such as delayed VAT refunds and audit inefficiencies. A sales tax, applicable only at the point of transaction, could simplify the process and shift focus from what is being purchased to who is purchasing it.

In a renewed twist to the long-standing saga of CL Financial (CLF), a High Court judge has halted the sale of a key asset of the defunct conglomerate, prompting Commissioner of Police Allister Guevarro to direct the Anti-Corruption Investigation Bureau (ACIB) to probe the transaction. This development, reported on October 13, marks another chapter in the tumultuous history of CLF, which collapsed in 2009, leading to a $28 billion state bailout. The ACIB’s investigation comes over a decade after it first launched a criminal probe into former CLF executives for their role in the company’s downfall. This time, the bureau is examining allegations of irregularities in the sale of group assets, including the Trincity Mall, which was sold for $505 million in 2024. Shareholders and creditors have raised “grave concerns” about these transactions, which occurred even after the Central Bank relinquished control of Clico, CLF’s former insurance arm, in 2022. The public’s demand for transparency grows as questions linger about the ACIB’s recent transfer from the police to the Office of the Attorney General. Past investigations, such as the Colman Enquiry initiated by former Prime Minister Kamla Persad-Bissessar, have yielded little accountability, with key figures like CLF’s Lawrence Duprey passing away before justice could be served. As Ms. Persad-Bissessar returns to power, there is hope that the findings of the Colman Enquiry will finally be published, though concerns remain that this latest probe may follow the same inconclusive path as its predecessors.