Business View Caribbean - January 2016 13
identifiable adjustments of seven percent reduction
in proposed operating expenses (eliminating waste
and/or inefficiencies) not relating to job cuts at this
instance.On the revenue side, Land and Building
taxes will be restored from January 2016 and a re-
vised value added tax (VAT) regime will be imple-
mented from mid-January. The minister of finance
will also be seeking to collect arrears of taxes, which
are considerable.
In addition, the government will bring legislation to
Parliament to separate the Heritage and Stabiliza-
tion Fund into two distinct Funds, leaving the bulk
of the existing fund in the Heritage component and
allocating the remainder to the Stabilization Fund.
“We intend to use approximately US$1 billion for
stabilization purposes in FY 2016 and perhaps an-
other US$0.5 billion in FY 2017,” Rowley said.
Using the Stabilization Fund will help to finance the
projected budget deficit and minimize increases in
government borrowing.
“The circumstances we now face are precisely
those which were envisaged for the use of the
Stabilization Fund and we will utilize it rather than
increase the country’s debt levels unnecessarily,”
Rowley pointed out.
He also noted that the government has already had
extensive discussions with Venezuela in respect of
producing gas from the Loran-Manatee field which
straddles the common border.
“The relevant companies are engaged in discus-
sions and we anticipate that work in developing that
field can begin in the not too distant future,” he said.
Rowley also noted that this is not the first time Trini-
dad and Tobago has had to face serious external
shocks and to deal with them.
“We went through very similar circumstances from
1969 to 1973, and again from 1983 to 1991. These
episodes are, unfortunately, a characteristic of econ-
omies which are highly dependent on petroleum or
natural gas and which have failed to diversify and
become competitive during periods of boom. What
we have learnt from the past is that we must not
act late in restoring a sustainable fiscal position as
well as external balance, and that balance must be
achieved with plenty of foreign exchange reserves
available so that investment and growth can pro-
ceed,” he said.
“As a symbolic gesture of our own willingness to
share in the necessary adjustments my colleagues
and I in the government have decided that, with ef-
fect from January 2016 and for the next two year, we
will each donate five percent of our salary to a se-
lected charity, NGO or sporting body of our choice,”
he added.
