The Trinidad and Tobago Chamber of Industry and Commerce (TTCIC) has raised concerns about the Government’s estimates of projected losses from oil, among other things.
Responding to pronouncements from Finance Minister Colm Imbert’s Mid-Year Budget Review last Friday, the business lobby organisation said, “Based on our concern as it relates to the revenue projections, we believe that the projected deficit may be understated.”
Imbert told legislators that the coronavirus (COVID-19) pandemic has severely impacted economic activity in the twin-island republic, but pointed out that the Government is addressing the global health crisis with a robust fiscal stimulus and financial support programme.
He acknowledged also that the combined shocks of the collapse in oil and gas prices and the disruption in economic activity, both locally and globally, have sparked major changes in the country’s economic forecasts.
“Based on our concern as it relates to the revenue projections, we believe that the projected deficit may be understated.”— Trinidad and Tobago Chamber of Industry and Commerce
To this the TTCIC agreed. However, the group reiterated that the minister’s calculations may be misaligned to current realities.
“In light of the developments in the international commodity market since the delivery of the 2019/2020 Budget, it was necessary to revise the budgeted price of oil to US$25 per barrel from US$60. Based on the uncertain demand for fuel in the coming months, even US$25 per barrel may be optimistic,” the organisation wrote in a media release.
“Given the collapse of current prices for LNG, ammonia and methanol, the reduction of the budgeted gas price to US$1.80 per MMbtu from $3.00 may not be conservative enough especially given the importance of natural gas to our economy,” it said in addition.
The TTCIC said that when it took into account the fall in energy prices and the falloff in domestic economic activity due to COVID-19 measure, it could not agree with Imbert’s projection of a 2.4 per cent decline in gross domestic product.
It even highlighted as “aggressive” the finance minister’s expectation of the country’s economic growth to “rebound to 4.7 per cent”.
In terms of the Government meeting its obligations, TTCIC said it “acknowledges that the minister of finance has made progress with regard to the payment of VAT refunds and we look forward to the final settlement of this matter.
“The minister, however, did not address the issue of settling arrears to government suppliers, which he committed to in a media release on March 18, 2020. We anxiously look forward to these long outstanding balances being paid expeditiously,” the chamber added.
Given the dire circumstances within which Trinidad and Tobago finds itself, the business advocacy association said it is pertinent that the political directorate spends wisely.
To this end, it recommended that the Government adopt “the necessary framework to allow for transparency and accountability of government funds”. Specifically, the TTCIC called on Parliament to finalise the passing on Act relating to public procurement regulations.
“The T&T Chamber continues to advocate for the implementation of the Trinidad and Tobago Revenue Authority (TTRA). The TTRA is long overdue but once implemented it will have the effect of widening the tax net to reduce the burden upon the compliant. We again call on the Opposition to act in the best interest of the country,” the group said in addition
“We look forward to the implementation of the recommendations of the Roadmap Committee to stimulate our economy and drive much needed economic transformation. The T&T Chamber is committed to working with stakeholders on these initiatives. Our belief is that strong businesses are the foundation of a prosperous Trinidad and Tobago,” the release ended.