THE American Chamber of Commerce (AmCham) and the TT Manufacturing Association (TTMA) have both expressed concern about government’s strong focus on taxation and lack of clarity in explaining how it intends to implement many of the policies announced in this year’s Budget statement.
“Overtaxing the formal economy is going to have a dampening effect on reinvestment,” AmCham said in a statement yesterday, adding that the presentation fell short on explaining how the government planned collect taxes in the more informal and underground economies. “Simply increasing taxes while admitting that tax collection in the sector is weak, is unlikely to work,” AmCham said. Most worrying, AmCham added, was the possible negative impact new taxes would have on the upstream energy sector.
AmCham did support plans for the Trinidad & Tobago Revenue Authority, which would include the Board of Inland Revenue and the Customs Department. It was also pleased with Finance Minister Colm Imbert’s adjustment of fuel margins. The TTMA said that while it believes that some of the policies in the Budget are pertinent to the development of the manufacturing sector, it will “remain cautious” until the government better explains its plans.
The announcement of a 30 percent “harmonized” Corporation Tax, however, can have the deleterious impact of stifling the capacity and growth of small and medium enterprises in already depressed conditions, the association said in a statement. The Trinidad & Tobago Chamber of Industry and Commerce, however, was somewhat more optimistic, noting that the government had made some “laudable first steps” towards incentivizing small business development, start-ups, agriculture and housing.
Government expenditure, however, was not addressed as aggressively as it should have, the Chamber said, nor did it address the apparent mismatch in the foreign exchange market. The Chamber added that while it acknowledged the government’s attempts to deal with the existing unsustainable levels of transfers and subsidies, a modern Trinidad & Tobago economy demanded efficient government services, but no long-term strategy had been clearly identified.