TT Chamber cautious over 'almost balanced budget'

While it welcomes the news of "an almost balanced national budget", the TT Chamber of Industry and Commerce advises caution since there's still the need to improve alternative revenue sources, other than the energy sector.

In a statement Saturday, the TT Chamber noted the government's optimism over a lower deficit of $329 million – less than 0.2 per cent of GDP – achieved for fiscal 2022 based on the Board of Inland Revenue's actual revenue of $54.21 billion – more than the original revenue estimate of $43.33 billion – which brought the budget almost on par with the $54.54 billion expenditure estimates.

"We are cautious in reading too much into the revised numbers as a further assessment would indicate a big driver of this was the doubling of energy sector revenues," the chamber said, adding it would like to see more focus on TT's revenue and expense cycles.

Although it recognises that oil and gas remains the mainstay of the economy – as Finance Minister Colm Imbert declared in his budget presentation earlier this month – the chamber said for the local energy sector to remain globally relevant there must be a "continuous assessment of the tax structures to encourage continued exploration and production across the industry, and incentives for alternate sources and types of energy."

"While remaining focused on ensuring maximum revenue yield from our energy economy, we must continue to address the investment of these revenues into productive areas of the economy. It cannot only be used to provide wages and salaries, subventions, and transfers to underperforming utilities and state-owned loss-making businesses, and for debt service. There must be a focus on areas of transitioning the rest of the economy to enhance revenue generation opportunities for the country."

The chamber said it remained committed to working with micro, small and medium enterprises, government and stakeholders to support this sector's growth and sustainability.

It again called for a faster pace of digital implementation to assist the ease of doing business which is critical to the growth and expansion of the economy.

Noting Imbert's disclosure that inefficiencies in the VAT Act affected the process of VAT refunds to the business community, the chamber said the problem must be dealt with as it hampers manufacturers access to cash flows retained by Government.

"The inaccessibility to this valuable capital affects businesses productivity and negatively impacts their ability to utilise this capital to provide trade finance for export customers to grow."

The chamber again raised challenges to the development of the agriculture sector, such as land tenancy regularisation and farmland access which are needed for projects to be "quickly and effectively implemented."

"These are just two examples of how the ease of doing business is limiting the growth of the private sector and must be addressed swiftly. Enhancing the future non-energy revenue opportunities and allowing the economy to grow and positively impact the non-energy GDP while enhancing employment opportunities, are key to economic growth and long-term sustainability."