Oil revenue decline forces T&T to diversify economy

Author:  Edited from CMC.
PORT OF SPAIN, Trinidad – The Trinidad and Tobago government has presented a TT$50.5 billion (one TT dollar = US$0.16 cents) budget to Parliament, outlining a number of taxes as the twin-island republic moves to diversify its economy as a result of a significant decline in revenue from the oil and gas sector.

oil field trini“We must move away from our dependence on oil and gas,” Finance Minister Colm Imbert said in a three and a half hour presentation Oct. 2. “… We cannot continue to live on borrowed money.”

Imbert told Parliament that the budget is predicated on an oil price of $52 per barrel and a gas price of $2.75 per mmbtu.

“It should be noted that our assumed oil price is below the International Monetary Fund (IMF) forecast of US$56 per barrel for 2018 and lower than the current oil price forecast made by the World Bank and the United States Energy Information Administration and the International Energy Agency,” he explained.

PROJECTION

Imbert said based on these assumptions, the government is projecting total revenue of TT$45.7 billion, of which oil revenue will be TT$6.41 billion and non-oil revenue TT$32.9 billion, capital revenue TT$6.4 billion.

“The total expenditure net of capital repayments and sinking fund contributions TT$50.501 billion,” he told legislators.

Imbert said there would be new taxes on fuel, a new range of incentives for the importation of hybrid vehicles taking into consideration a loophole that allowed for persons to import these type of vehicles with big engines and avoiding paying the necessary takes.

He said while the incentives in the past had encouraged the importation of clean energy vehicles “… individuals have taken advantage on the tax waiver on hybrids to import luxury vehicles.

“This has caused a significant leakage of tax revenue,” Imbert said.

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