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Trinidad And Tobago Budget Raises Taxes

by Mike Godfrey,, Washington

05 October 2016

Trinidad and Tobago's Minister of Finance, Colm Imbert, announced tax increases in the territory's 2016/17 National Budget presented to Parliament.

From January 1, 2017, a new tax bracket of 30 percent will apply to high-income individuals whose chargeable income exceeds TTD1m (USD149,259) per annum and on companies with chargeable profits in excess of this threshold.

The existing Property Tax Act, which imposes a flat tax rate of three percent, will come into effect in the 2017 fiscal year.

The price of diesel increase by 15 percent with immediate effect and will now be 75 percent of the true market rate.

The territory will proceed with previously announced plans to impose a seven percent charge on online purchases, effective from October 20, 2016. The tax will be due and payable at bonded warehouses before clearance of goods or directly to Customs in the same way that VAT and customs duty are currently collected.

To reduce tax leakage through transfer pricing, Trinidad and Tobago is engaging with the Inter-American Centre of Tax Administrations on improving transfer pricing policy and legislation.

Trinidad and Tobago's Government intends to legislate to bring all forms of betting and gaming activities under a comprehensive, robust, and stringent regulatory framework. The legislation is intended to meet the global standards required by the Financial Action Task Force and the Caribbean Financial Action Task Force.

Regulations are being drafted to give income tax relief to investors who construct multi-family dwelling units. These investors will join other similarly placed investors who can claim income tax relief for investments in newly constructed houses and for houses in residential land development projects.

Foreign yacht repair services will be VAT exempt for yacht owners with effect from the first quarter of 2017. The move is intended to make Trinidad and Tobago as competitive as possible in the maritime sector, compared with other Caribbean islands.

An "Agro-Processing Tax Relief" will be implemented in the second quarter of the 2017 fiscal year, which will make approved agro-processing operations tax free. A certification process will be put in place to ensure that only qualified applicants benefit from this tax relief.

A Public-Private Partnership Business Tax relief will be implemented over the next four years commencing in the first half of 2017. The government will provide 50 percent tax relief and other fiscal incentives to businesses that can mobilize private sector funding to provide public infrastructure and/or public facilities now provided solely by government. Projects that increase productivity and create meaningful employment will also be considered for inclusion.

In addition to tax rises and targeted tax reliefs, the territory's Government will establish a new Revenue Authority in 2017, which will replace the Board of Inland Revenue and Customs and Excise Division. The first year revenue effect of the Revenue Authority is estimated to be in excess of TTD100m (USD14.93m), rising exponentially thereafter.

TAGS: individuals | Finance | tax | investment | business | Trinidad and Tobago | excise duty | legislation | transfer pricing | standards | Financial Action Task Force (FATF) | services | Regulations | Tax

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