...TTMA president wants VAT removed on heavy equipment
President of the Trinidad and Tobago Manufacturers Association (TTMA) Nicholas Lok Jack yesterday said he hoped the September 9 budget included incentives for local producers and manufacturers.
Chief among his budget wishes was the removal of Value Added Tax on heavy machinery and raw materials that formed part of the fixed assets for local manufacturers.
“We are not reselling the equipment, so we are hoping the VAT could be removed,” Lok Jack said.
He said the TTMA was in the process of putting together its recommendations for this year’s budget and expected to meet with Finance Minister Larry Howai as part of the usual consultation process before the budget.
“The duty is very expensive, sometimes as much as $20 million, and that is a cash drain on the manufacturers.”
Lok Jack said the slow pace of VAT recovery was also hindering local business. “They need to find a way to incentivise manufacturers which would also entail strengthening the relevant regulatory bodies.”
He was referring to bodies like the Chemistry, Food and Drug divisions which needed to approve locally-produced goods before they can be exported.
“Once those types of bodies are strengthened, maybe with more staff, it would ease the burden on local products trying to enter foreign markets,” he said.
Lok Jack described the strengthening of regulatory bodies as “critical” to the success of locally-produced goods.
He said a positive side effect of stronger regulatory bodies was that sub-standard goods would be kept out of the country.
“I am also hoping we hear something about the port (of Trinidad and Tobago),” he said.
And the national budget should address subsidies like gasoline and electricity, one of the country’s most powerful business groups suggested.
President of the American Chamber of Commerce (AmCham) Hugh Howard told the Express it was a good sign that the budget was going to be presented in early September.
“It’s a good sign that the budget is being presented before the expiration of the Government’s fiscal year (on September 30),” Howard said during a telephone interview from Toronto, Canada. “We have seen budgets being presented in October or late October and if the Government is tracking all its promises, all the private sector has asked for, then the budget should be ready prior to the end of the fiscal year.”
The big question, Howard said, is what the budget will contain.
Subsidies and transfers in the energy sector, like those on gasoline and electricity, should be addressed on a phased basis.
“We’ve said there is a need to phase the costs of these things, not immediately of course but in stages,” Howard said.
Last year’s fiscal package presented by Howai increased the price of premium gasoline at the pumps as a measure to reduce the $4 billion fuel subsidy. —Renuka Singh