Trinidad and Tobago’s Minister of Finance, Colm Imbert, has announced a range of tax rises in the territory’s recent 2018 Budget.
From January 1, 2018, the base tax rate for companies will rise from 25 percent to 30 percent, and a new tax bracket of 35 percent will be imposed on commercial banks.
Tax increases are proposed for the gaming industry, including a doubling of duty on gaming machines to 40 percent from October 20, 2017, and the introduction of a 10 percent tax on all cash winnings by the National Lotteries Control Board from December 1, 2017.
Annual flat taxes are proposed on slot machines, roulette machines in bars, and on gaming tables, including poker, roulette, and baccarat tables, to take effect from January 1, 2018. The annual gaming tax will be doubled to TTD6,000 (USD890).
A review of energy taxation is underway. Proposed measures include making the territory’s supplemental petroleum tax responsive to underlying profitability, rather than price; extending the tax to gas; and reconciling and simplifying the fiscal regimes applicable to exploration and production and production sharing systems.
The royalty regime applicable to oil and gas extraction will be rationalized. A 12.5 percent royalty rate will apply across the board on the extraction of all gas, condensate, and oil. To avoid revenue leakage and to avoid abuse, the fair market values for oil and gas for the computation of the royalty will be fixed by the Petroleum Pricing Committee.
The property tax regime will be implemented in full in 2018, with the Budget highlighting its importance to the fiscal mix and the negative impact of its waiver from 2010-15.
Tax compliance efforts are ongoing, including ensuring no companies receive incentives that should have expired or are no longer required, and making sure self-employed professionals and businesses pay all taxes due, including value-added tax.
Major improvements in tax administration continue, the centerpiece of which is the creation of the Revenue Authority, which brings together the Board of Inland Revenue and the Customs and Excise Division under one administrative umbrella. Legislation establishing the Revenue Authority will be introduced to parliament by December 2017.
Customs duty on car tires will be harmonized at 30 percent, whether new or used, while the duty on the importation of new tires used on buses and lorries will remain at 15 percent. An environmental tax of TTD20 (USD3) per tire is proposed on all tires imported into Trinidad and Tobago.
Tax and duty exemptions for hybrid passenger vehicles with engine sizes under 1599cc will be maintained and extended to CNG passenger vehicles. Motorcycles with engine sizes under 300cc will also be exempt from all duties and taxes.
All incentives currently available to passenger vehicles with engine sizes exceeding 1599cc will be removed. Motor vehicle tax and customs duty on private passenger vehicles with engine sizes exceeding 1599cc and not exceeding 1999cc will rise by 25 percent. The increase in taxes imposed last year on vehicles with engine sizes exceeding 1999cc will remain.
