N Touch
Saturday 22 September 2018
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Letters to the Editor

A complete head-scratcher

THE EDITOR: After listening to the 2018 budget statement, I was left confused, dumbfounded, and with more questions than answers. Basically, I was left scratching my head. While I took umbrage to a few items in the budget, I’ll tackle the two most disheartening aspects, namely taxation and the forex challenges.

Taxation: I agree with the minister’s noble commitment to have everyone share the burden of our economic challenges. However, in a small oligopolistic economy like ours, the taxes imposed will unfortunately fall mostly on the consumer. For instance, the increased fuel prices mean paying more for groceries and transportation.

Taxing private hospitals means paying more by the average consumer who can’t wait lengthy periods to have urgent procedures done at the inefficient and inadequately supplied public hospitals.

Taxing a larger subset of hybrid vehicles mean less fuel-efficient vehicles available for purchase. More disturbingly, perhaps the Government did not consider the reason 35k cars were sold in TT is a direct result of crime and safety concerns as well as limited access to reliable public transportation.

The minister began his presentation indicating his ambition to increase business activity and attract more foreign direct investment. However, he increased the tax rate to 30 and 35 per cent for corporations and banks, respectively. Such a burdensome tax regime will undoubtedly have adverse effects for our economy.

Late UK Prime Minister Winston Churchill said it best, “I contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.”

Given the various contradictions observed in the Budget statement, I am again left scratching my head.

Forex: According to Central Bank data, the retail and distribution sector accounts for approximately 30 per cent of distributed foreign exchange in TT. Given that this sector generates little or no foreign exchange, there was no mention of a dedicated policy to reduce the distribution of forex to this group. Without stringent parameters in place, it appears the burden of forex challenges will continue to fall on the most vulnerable in our society.

The minster also spoke about creating a provision of US$100 million to facilitate greater foreign currency access for exporters through the Eximbank. However, the bank already has a myriad of financing options in place for domestic exporters. Essentially, this initiative doesn’t incentivise any new export activity. Thus, I am also left scratching my head about what has been done to improve forex challenges and export capacity in the country.

Finance Minister Colm Imbert quoted Black Stalin in his budget statement. Perhaps he did not listen to the entire rendition of the calypsonian’s We Can Make It If We Try. He also said:

We fire the old set of managers we had working

And is a new group we went and we bring in

And if the goods we require, them new managers not supplying

When election time come back ’round is new ones we bringing

So while I continue to scratch my head and figure out how to contend with the deleterious impacts of this budget on our lives, I urge the minister to take his own advice — we can make it if we try, but that means you and your administration should lead and try much harder.


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