Imbert gives tax amnesty in feel-good review

Put your tax­es in or­der via Gov­ern­ment’s up­com­ing three-month tax amnesty, be­cause fu­ture amnesties are un­like­ly.

This was Fi­nance Min­is­ter Colm Im­bert’s warn­ing in his mid-year re­view yes­ter­day as he an­nounced the amnesty on all forms of tax­a­tion.

The mea­sure was the on­ly one an­nounced in Im­bert’s “good news” re­view, where he paint­ed a glow­ing pic­ture of the econ­o­my, gave as­sur­ances on re­cent con­cerns about BPTT’s gas sup­plies for At­lantic LNG’s Train One - and hit crit­ics and com­men­ta­tors.

“... Notwith­stand­ing this cam­paign of neg­a­tiv­i­ty, da­ta avail­able from our Cen­tral Bank, Cen­tral Sta­tis­ti­cal Of­fice, the Fi­nance Min­istry and En­er­gy Min­istry and in the pub­lic do­main, con­firms the in­dis­putable fact that we’ve re­cov­ered from the oil shock of 2014 to 2016 and we’ve sta­bilised our econ­o­my,” Im­bert said dur­ing his 44-minute ad­dress to Par­lia­ment.

Im­bert didn’t im­pose any tax­es or raise the fu­el price, which he did in the last Bud­get and pre­vi­ous ones. He, how­ev­er, in­creased the 2019 Bud­get from its ini­tial $51.7 bil­lion lev­el to $52.07 bil­lion.

On the amnesty, Im­bert said, “We’ve es­tab­lished a foun­da­tion on which we can now adopt ex­pan­sion­ary ini­tia­tives and this suc­cess hasn’t oc­curred by chance. Ac­cord­ing­ly, at this time we see no need what­so­ev­er to im­pose any ad­di­tion­al bur­dens on our cit­i­zens.”

In that con­text and to al­low the soon-to-be-es­tab­lished T&T Rev­enue Au­thor­i­ty to start with a clean slate, he added, “There will be a three-month tax amnesty, start­ing mid-June and ex­tend­ing to mid-Sep­tem­ber 2019, to all forms of tax­a­tion. Ap­pro­pri­ate leg­is­la­tion to give ef­fect to this mea­sure will be in­tro­duced in (Par­lia­ment) with­in the next few weeks.

“Tax­pay­ers are urged to take ad­van­tage of this amnesty, file their out­stand­ing re­turns and pay their back tax­es, be­cause once the new Rev­enue Au­thor­i­ty comes on stream, fu­ture amnesties are un­like­ly.”

Par­lia­men­tary com­mit­tee re­ports on leg­is­la­tion to fa­cil­i­tate the long-planned TTRA (and to reg­u­late the gam­ing sec­tor) were laid in Par­lia­ment yes­ter­day, bring­ing the TTRA and gam­ing sec­tor reg­u­la­tion a step clos­er.

Im­bert al­so sought to al­lay con­cerns which arose af­ter BPTT an­nounced it may not be able to guar­an­tee a con­tin­ued gas sup­ply for At­lantic LNG’s Train One plant. Pri­or to his de­liv­ery, the Op­po­si­tion had asked Im­bert to ex­plain the pos­si­ble im­pact of the sit­u­a­tion on T&T’s eco­nom­ic re­cov­ery. Im­bert had told the Op­po­si­tion then he would re­ply to this in the re­view.

Cit­ing “alarmist” ar­ti­cles about the gas con­cerns, he added, “The un­war­rant­ed neg­a­tiv­i­ty that’s ev­i­dent in these pub­li­ca­tions fol­lows a pat­tern that’s en­dem­ic in some quar­ters.”

Im­bert said Gov­ern­ment is en­sur­ing that nat­ur­al gas pro­duc­tion will con­tin­ue to be a ma­jor dri­ver of eco­nom­ic growth.

“Large­ly be­cause of the ef­forts of our en­er­gy sec­tor ne­go­ti­at­ing teams, nat­ur­al gas pro­duc­tion in­creased in 2018 to an av­er­age of 3.63 bil­lion stan­dard cu­bic feet per day, an 8 per cent in­crease over the 2017 av­er­age of 3.36 bcf per day. Fur­ther, gas pro­duc­tion con­tin­ues to in­crease and is ex­pect­ed to reach an av­er­age of 3.8 bcf per day in 2019. In­deed, pro­duc­tion is al­ready av­er­ag­ing 3.81 bcf per day in the first quar­ter of 2019.”

He added, “Al­low me to clar­i­fy (the BPTT is­sue). The BP wells with less than sat­is­fac­to­ry re­sults are on­ly two in num­ber and are in­fill wells in ex­ist­ing gas fields. Un­like ex­plo­ration wells, in­fill wells are nor­mal­ly brought in­to pro­duc­tion al­most im­me­di­ate­ly. I’m ad­vised that one of these in­fill wells will go in­to pro­duc­tion short­ly, al­though with low­er vol­umes than an­tic­i­pat­ed, leav­ing just one un­pro­duc­tive well. All this dra­ma over one un­pro­duc­tive well is to­tal­ly un­nec­es­sary!

“How­ev­er, in Feb­ru­ary 2019, just three months ago, gas pro­duc­tion al­most reached 4.0 bcf per day, the high­est pro­duc­tion since March 2015. Ac­cord­ing­ly, notwith­stand­ing re­cent events, the En­er­gy Min­istry, af­ter con­sul­ta­tion with the ma­jor oil and gas com­pa­nies, has ad­vised that gas pro­duc­tion is still ex­pect­ed to av­er­age 3.8 bcf per day in 2018.”

Im­bert added, “When BHP Bil­li­ton an­nounced the dis­cov­ery of a sig­nif­i­cant gas find in 2018, and an­oth­er en­cour­ag­ing gas find in April 2019, and the com­pa­ny made it clear that it in­tend­ed to make a huge fi­nan­cial in­vest­ment in T&T, we didn’t hear one peep out of the naysay­ers. Clear­ly, they’re al­ler­gic to good news.

“Fur­ther, oil pro­duc­tion is pro­ject­ed to sta­bilise in 2019 and there­after trend steadi­ly up­wards from the cur­rent 60,000 bar­rels per day in 2019 to over 80,000 bar­rels per day by 2023. This pro­ject­ed ex­pan­sion is part­ly due to the per­for­mance of the new­ly-es­tab­lished oil pro­duc­tion com­pa­ny, Her­itage Pe­tro­le­um, which has be­gun to ramp up its ex­plo­ration and pro­duc­tion ac­tiv­i­ties, as well as the planned ac­tiv­i­ties of oth­er lo­cal oil pro­duc­ers.

“We al­so en­vis­age that bar­ring un­fore­seen cir­cum­stances, the re­sump­tion of re­fin­ing op­er­a­tions at Point-a-Pierre could take place by De­cem­ber 2019, since a num­ber of strong pro­pos­als for re­open­ing the re­fin­ery are ex­pect­ed. Al­so, the Caribbean Gas Chem­i­cal Methanol to Di­methyl Ether Plant is ex­pect­ed to come on stream lat­er this year.”

Hous­ing bonds in 2 months

Im­bert al­so said the first is­sue of the promised hous­ing bonds would be due with­in the next two months at the rate of 4.5 per cent per an­num over five years. Pro­ceeds will be utilised to im­me­di­ate­ly ac­cel­er­ate the hous­ing con­struc­tion pro­gramme, with the pro­ceeds from mort­gages is­sued by the T&T Mort­gage Fi­nance Com­pa­ny (TTMF) be­ing used to fi­nance de­vel­op­ment and sale of hous­es on an on­go­ing ba­sis.

Bonds will be of­fered to in­di­vid­u­als in the first in­stance. The bond will be un­der­writ­ten so that any bonds not sub­scribed by in­di­vid­u­als will be placed with in­sti­tu­tion­al in­vestors on the sec­ondary mar­ket af­ter the close of the bond is­sue.

Ini­tial in­vestors with a min­i­mum of $5,000 in­vest­ment will re­ceive pri­or­i­ty for a hous­ing unit, once that in­vestor meets the Hous­ing De­vel­op­ment Cor­po­ra­tion’s el­i­gi­bil­i­ty cri­te­ria.

“With over 75,000 qual­i­fied per­sons on HDC’s list, we ex­pect to be able to as­sist a sig­nif­i­cant num­ber of peo­ple,” he said.

He said el­i­gi­ble for­mer Petrotrin em­ploy­ees will al­so soon ben­e­fit from a land dis­tri­b­u­tion pro­gramme, in­volv­ing own­er­ship of res­i­den­tial lots and ac­cess to agri­cul­tur­al sites with as­so­ci­at­ed fi­nan­cial sup­port.

Im­bert al­so an­nounced in­ten­tion to grant ap­proval “in the very near fu­ture” to the To­ba­go House of As­sem­bly to raise loan fi­nanc­ing on the lo­cal mar­ket in the sum of $300 mil­lion for de­vel­op­ment projects, in­clud­ing health and sport­ing fa­cil­i­ties, hous­ing, roads and bridges, coastal pro­tec­tion and the THA’s in­no­v­a­tive “In­tel­li­gent Is­land” ICT project.

On the term, he added, “Our suc­cess is the re­sult of a vi­sion con­cep­tu­alised while we were out of of­fice and res­olute­ly and con­sis­tent­ly im­ple­ment­ed in of­fice. This road hasn’t been easy; but I dare­say no oth­er road would have brought us such suc­cess...”

OTH­ER RE­VIEW NEWS:

• 2019 Bud­get’s oil price ba­sis changed from US$65 to US$60.

• But with gas prices av­er­ag­ing US$3.26 per MMB­tu over Oc­to­ber 2018–April 2019, the gas price as­sump­tion has been re­vised up­wards to US$3.00 per MMB­tu from the bud­get­ed US$2.75.

• Low­er oil to­tal rev­enue, ini­tial­ly bud­get­ed at $47.72B, pro­ject­ed to fall to $47.50 bil­lion.

• $1.87B added to Bud­get to pro­vide funds for 18 min­istries/di­vi­sions for sup­pli­ers/con­trac­tors/ser­vices.

• Rev­enue in the first half of 2019 was $706 mil­lion above the pro­grammed rev­enue es­ti­mat­ed in the con­text of the bud­get­ed $47.72b.

• On the oth­er hand, as a re­sult of tight cash flow sit­u­a­tion, ex­pen­di­ture in the first half of 2019 was $2.55 bil­lion be­low pro­grammed ex­pen­di­ture.

• Orig­i­nal­ly es­ti­mat­ed fis­cal deficit for 2019 was $4.05b; but for pur­pos­es of ad­min­is­tra­tion, with cap­i­tal rev­enue pro­grammed for the sec­ond half of the year, a deficit of $5.11b was pro­grammed for the first six months of the year. How­ev­er, the ac­tu­al record­ed deficit for the first half of 2019 was on­ly $1.85b.

• Her­itage and Sta­bil­i­sa­tion Fund (HSF) hit an all-time high of US$6.1b.

• Of­fice of Pro­cure­ment Reg­u­la­tion (OPR) has reached 95 per cent of its re­quired staffing. Soft­ware ap­pli­ca­tion is be­ing in­stalled to fa­cil­i­tate es­tab­lish­ment of a com­pre­hen­sive data­base on pub­lic pro­cure­ment, in­clud­ing in­for­ma­tion of ten­ders re­ceived, the award and val­ue of con­tracts.

• The Pro­cure­ment De­pos­i­to­ry ex­pect­ed to be ac­ces­si­ble with­in the next three months.

• De­tailed com­ments on re­draft­ed pro­cure­ment reg­u­la­tions will be sub­mit­ted by the Fi­nance Min­istry to the Pro­cure­ment Reg­u­la­tor in the next few days. Bar­ring un­fore­seen cir­cum­stances, fur­ther procla­ma­tion of im­por­tant sec­tions of the act can be achieved by Au­gust 2019.

• Mar­ket as­sess­ment/fea­si­bil­i­ty stud­ies on La Brea dry-dock and ship­build­ing/ship re­pair fa­cil­i­ty on. If all goes well” pub­lic-pri­vate-part­ner­ship arrange­ment would be in place “in the near fu­ture.”

• De­liv­ery of Cou­va Hos­pi­tal health care will “com­mence short­ly.”

• San Fer­nan­do to Point Fortin High­way com­ple­tion sched­uled for De­cem­ber 2020.

• To­ba­go air­port ter­mi­nal con­struc­tion sched­uled to com­mence in De­cem­ber 2019, with com­ple­tion by ear­ly 2021.

Reporter: Gail Alexander

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