PORT OF SPAIN, Trinidad & Tobago: The government has presented a TT$54.6 billion budget (US$9.1 billion) to Parliament designed to transform the economy.
Finance Minister Winston Dookeran, a former Central Bank governor, said that while the local economy remains resilient and the financial system is strong “our national economy is still at risk and remains vulnerable to external shocks”.
Dookeran said the budget was based on an oil price of US$75 per barrel and a gas price of US$2.75 per million BTUs, a real gross domestic product (GDP) growth of 1.7 per cent and an average inflation rate of seven per cent.
The government expects to run a TT$7.6 billion (US$1.26 billion) deficit or 4.89 per cent of GDP on revenues of TT$47 billion (US$7.8 billion), $18.1 billion (US$3.01 billion) from the energy sector and TT$28.9 billion (US$4.81 billion) from the non-energy sector.
Dookeran said 52.7 per cent of the deficit would be financed domestically while the balance would be provided by external sources, including multilateral financial institutions.
As part of the transformation, small and medium sized businesses (SMEs) will now be able to raise capital locally through the T&T Stock Exchange.
“For too long they have been relying on high cost commercial finance which has limited their viability and expansion. In our efforts to assist the SME sector and at the same time strengthen the domestic capital market we are proposing to encourage them to access the facilities provided by the Trinidad & Tobago Stock Exchange (TTSE),” Dookeran said.
He said to encourage such development, the Corporation Tax Act will be amended to provide for a reduced corporation tax at a rate of 10 per cent on taxable profits for the first five years of operation.
Other measures announced include expanding the Deposit Insurance to protect depositors, broadening the social security net and simplifying the national insurance benefits.