Energy Chamber grateful for five per cent tax credit increase

TT Energy Chamber CEO Dr Thackwray "Dax" Driver says govermnent's five per cent increase in investment tax credit for energy companies is appreciated. But he says more should be done in order to further enhance and incentivise productivity, specifically in gas exploration.

Speaking with Newsday at the Port of Spain Rotary Club in Woodbrook on Tuesday, Driver praised the government and said the increase was a step in the right direction. He is calling for more investment in the energy sector.

"It’s (increase in investment tax credit) something we've been asking for, for a long time. So, it's good to see some acknowledgement from the Minister of Finance. This is something that will help. Until we run the numbers, it's difficult to give a really definitive answer on what the impact will be, but it's definitely a move in the right direction."

The increase from 20 to 25 per cent was done to stimulate further exploration and development-related investments in the energy sector.

The incentive, which becomes effective from January 1, promises to allow companies to claim 25 per cent of the expenditure on development activity for mature fields, and enhanced oil recovery projects as a credit against their supplemental petroleum tax liability.

Driver also commended government, through Finance Minister Colm Imbert, on reducing expenditure and said there should be a more sustained effort from government in reducing wastage.

He said among the challenges facing the energy services sector, was low productivity and lower than usual margins. He urged companies to revisit their business models.

"They've been under tremendous strain over the past few years. They're trying to access export markets which is not an easy thing to do. We want to see this sector be a driver for export and diversification while being realistic in light of the strain they have been under, because that really affects their abilities to reinvest in their companies and survive."