Amcham hears of mixed reaction to Budget

The National Budget is a mixed bag,  Amcham members heard yesterday at a post-Budget panel discussion at the Hilton Trinidad. Citicorp Vice President, Raymond Gatcliffe, discussing the “Implications for the Financial Sector,” welcomed some Budget initiatives but called for more. He noted the sector had assets of $80 billion, and managed funds of $20 billion and that the sector represents 15 percent of the GDP, second only to the petroleum sector. While praising the implementation of some of last year’s Budget announcements, he noted the failed promises of the Government to create a credit union bank, bring all promised financial services legislation, restructure the Unit Trust Corporation into a public liability company, and legislate to institutionalise the Interim Revenue Stabilisation Fund.

“Nothwithstanding that an amount of $497 million was deposited to the fund in 2003 it is noteworthy that the Minister did not seek to restate the Government’s intention to institutionalise the fund in 2004.” Gatcliffe welcomed the Government’s promise of a regulatory framework for the Mutual Funds Sector, removal of tax from savings, and support for a regional credit rating agency. While supporting an auction system for Government bonds, he urged that individuals get the chance to access such bonds. Acknowledging the Government’s desire to deal with pension reform, he hoped it would address the burning issue of privatisation of local pensions including NIS, which he called a positive step, and a measure which when done in Chile was endorsed even by the trade unions. Gatcliffe urged Government to reconsider the system of the withholding taxes paid by local financial institutions which borrow hard currency for on-lending. He said: “Any loss of tax revenue due to the removal of withhold tax will be replaced by revenues several times over in corporate taxes paid as a result of incremental interest revenues from such large project financings.”