DS BUSINESS SUPPORT SERVICES LTD - RESETTING THE ECONOMY FOR GROWTH AND INNOVATION - A focus on Trinidad and Tobago 2020/2021 budget - ICATT

DS BUSINESS SUPPORT
                SERVICES LTD

RESETTING THE ECONOMY FOR GROWTH AND
INNOVATION –
A focus on Trinidad and Tobago 2020/2021 budget.

Caveat
The material and information hereinunder is for general
information purposes only and should not be relied upon as a
basis for making any business, legal or any other decisions.
Always seek independent professional or legal advice.

REVENUE

2020/2021 budget is based on an oil price of US$45 per barrel and a gas
price of US$3 per mmbtu.
-   Oil based revenue $9.265B
-   Non-oil revenue $31.193B
-   Capital revenue   $0.905B

EXPENDITURE
1.   Education and Training              $7.973B
2.   Health                              $6.050B
3.   National Security                   $5.227B
4.   Works and Transport                  $2.956B
5.   Public Utilities                     $2.091B
6.   Rural Development & Local Government $1.642B
7.   Agriculture                          $1.198B
8.   Housing                              $1.000B

Fiscal and Other Measures
TECHMOLOGICAL (effective 1/1/2021)
- A tax allowance of 150% ($3M cap) for businesses which invest in tech
starts-up and new tech businesses;
-   Removal of all taxes on mobile and digital equipment, mobile phones,
    software, computer accessories and peripheral;
-   A tax allowance of 150% ($3M cap) will be provided to businesses which
    are engaged in technology solutions and digitalization;
-   A tax allowance of 150% ($3M cap) to businesses which create
    employment in technology industry.

Fiscal and Other Measures cont’d
MiFi FOR STUDENTS
From March 1st, 2021 internet MiFi for 45,000 students (based on need)

WiFi HOTSPOTS & INTERNET CAFES
Expansion of existing WiFi hotspots and establishing internet cafes with
specific emphasis on remote areas from 1/1/2021

Fiscal and Other Measures cont’d

IMPORTED CONSTRUCTION MATERIALS
Removal of Import VAT from 1/1/2021 on “approved housing, commercial
and industrial development projects which start on or before 31/12/2022”

STAMP DUTY
Waiver of stamp duty for first-time homeowners (residential properties).
The threshold will be increased from $1.5M to $2M effective 1/1/2021.

Fiscal and Other Measures cont’d
PROPERTY DEVELOPMENT ALLOWANCE
“approved property development companies” to claim as a deduction 20%
from the 15% of the capital expenditure in constructing commercial,
industrial or multi-family residential buildings which are completed by
31/12/2024 (amendments to the Corporation Tax Act is needed to give
effect to the proposed measure)

TOURISM ACCOMODATION UPGRADE PROJECT
A reimbursable grant to “eligible tourism accommodation facilities” from
1st October 2020 to 30th September 2023.

Fiscal and Other Measures cont’d
WEAR & TEAR FOR PLANT AND EQUIPMENT
Effective 1/1/2021 the allowable rate will increase from 25% to 30%.

ILLEGAL QUARRYING
Private Lands: 200% increase in all penalties, fines and custodial sentences
– 1/1/2021
State Lands: 200% increase in all penalties, fines and custodial sentences
(asphalt and other materials) – 1/1/2021
Any company that knowingly trades in illegally sourced quarry material
will be disqualified from participating in government construction
projects.

Fiscal and Other Measures cont’d
PREDIAL LARCENY
A 200% increase in Predial Larceny fines and custodial sentences from 1/1/2021

SUPPLEMENTAL PETROLEUM TAX (SPT)
The $50 per barrel threshold will increase to $75 per barrel effective 1/1/2021 in the
first instance for “Small Onshore Oil Producers”

VAT BASE
Full 12.5% VAT will now be applied to a “wide range of imported luxury food
items” from 1/1/2021 (full list will be published in due course).

Fiscal and Other Measures cont’d

MOTOR VEHICLES
•   A 30% reduction in the quotas for the importation of used cars (permissible age
    will now be reduced to 3 years) from 1/1/2021
•   Introduction of quota system for new cars from 1/1/2021
•   Removal of all tax incentives on the importation of private motor cars. CNG,
    Hybrid and Electric cars will now attract the lowest rates of duty and tax –
    1/1/2021
•   Tax Concessions remains for commercial, industrial and public transport
    vehicles.

Fiscal and Other Measures cont’d

CIGARETTE USAGE
20% increase in exercise duty/customs duty on locally manufactured,
common market origin and extra-regional sources.

STATUTORY PENALTIES [ALCOHOL]
Effective 1/1/2021:
- a 200% increase in all penalties for selling alcohol and tobacco to minors;
-   a 200% increase in all penalties under the Liquor License Act
-   a 200% increase in all penalties under the Tobacco Control Act

Fiscal and Other Measures cont’d
WORKFORCE RECOVERY PROGRAMME
$6.75M to fund stipends for 500-person enrollment for YTEPP courses that will commence 1/1/2021 and conclude
30/09/2021

PUBLIC SECTOR
Freezing the filling of all vacant posts for 1-year effective 6th October 2020

SME’s TRADING ON TRINIDAD AND TOBAGO STOCK EXCHANGE
Proposed amendment to s.2 of the Corporation Tax Act to allow for the following
(effective 1/1/2021):
-   an increase in the incentive period from 5 years to 10 years
-   a Full tax holiday for the First 5 years following listing
-   a 50% tax holiday for the Second 5 years following listing

Fiscal and Other Measures cont’d
CREATIVE & SPORTING ACTIVITIES
Corporate sponsorship tax allowance will be increased from $6M to $12M from
1/1/2021 for “sponsorship of nationals in the local fashion industry, audio, visual or
video production for the purpose of local education or entertainment” as well as for
companies which sponsor sporting activities or events or sportsmen or art and
culture.

PERSONAL INCOME TAX ALLOWANCE
Effective 1/1/2021 the Personal Income Tax Allowance will be increased from $72,000
to $84,000 per year.
This means persons earning $7,000 or less per month will not pay Income Tax on
their earnings, however these persons will now be subject to higher NIS deductions.

PROPERTY TAX

The commencement of the Property Tax Regime in 2021:
The Commissioner of Valuation will soon be making mandatory request of
property owners under s29 of the Valuation of Land Act for the provision
of information to expedite the process and validate the information on the
Valuation Roll.
The objective is to commence the collection of property tax in 2021.

REFORM OF THE LIQUID PETROLEUM
PRODUCTS SECTOR
The soon to be “deregulated market” will bring an end to fixed pump prices.
However, wholesale margins will remain fixed for the time being and the
Ministry of Energy and Energy Industries will post the changes in the refinery
prices on the first day of each month.
Effective 1/1/2021
-   New trading arrangements between importer of fuel and wholesalers based on
    prevailing market rates,
-   No fixed retail price for gasoline and diesel, prices will be determined by each
    retailer,
-   If oil price recovers, the price of gasoline and diesel will increase proportionally,
-   Liquid petroleum gas (LPG) remains subsidized.

About the author.
Carl Eassu Sooko is the Director of Taxation and
Consultancy at DS Business Support Services
Limited.
Carl is a Fellow of the Association of Chartered
Certified Accountants (FCCA) and a Member in
Practice of the Institute of Chartered Accountants of
Trinidad and Tobago (ICATT).
He is also a Practicing Attorney-at-Law having
graduated from the University of London (LLB with       Get in touch:
honors) and a post graduate diploma from                DS Business Support Serv ices Limited
                                                        309 Sancho Road, New Grant,
Staffordshire University (LPC).                         Trinidad.
                                                        dsbusiness21@hotmail.com
Carl has diverse experience in accounting, taxation,    1 (868) 783-5363
                                                        1 (868) 798-8283
corporate, commercial and business law.