AmCham: Hold consultations on Property Tax

Commenting on yesterday’s Mid-Year Review in Parliament, AmCham TT noted that within his presentation, Finance Minister, Colm Imbert “addressed measures being taken on the implementation of the Property Tax. While the focus in the interim is on residential properties, it is our hope that there will be adequate discussion on industrial property tax prior to its implementation. Earlier articulation surrounding the tax on industry suggests that there may be a negative impact on re-investment and new investment.” Another area of concern for AmCham TT was Imbert’s announcement that he had requested the Central Bank give priority to trade and manufacturing regarding access to foreign exchange.

“This is, as we understand, the status quo and will unlikely result in any significant change.” AmCham TT argued that Government “needs to articulate a clear set of long-term plans and initiatives to address these and other issues to inspire greater confidence in the local economy.” Looking at the energy sector portion of the Mid-Year Review, Am- Cham TT welcomed the news that, as Imbert stated, “We have listened and are in broad agreement with the upstream producers that a reform of the Supplemental Petroleum Tax (SPT) is required. We are satisfied that in a low-price environment and in its present form the SPT does not facilitate immediate investment.” Imbert explained that SPT rates can vary from a low of 18.0 per cent to a maximum of 55.0 per cent, depending of the price of crude oil as well as the size, maturity and location of the oil field and is triggered when the price increases above US $50 per barrel of oil.

“Although the SPT has a system of credits and discounts and is minimised through deductibility against the Petroleum Profit Tax (PPT) its application is not investment-friendly in that once a price band is triggered the new rate applies to all production from the relevant license. The reform would modify the SPT to bring a degree of stability and predictability of terms in the fiscal regime faced by the Government and upstream operators,” Imbert said.

Regarding this, Am- Cham TT reminded that “In previous presentations, the Government committed to a review of this tax in an effort to boost oil production.

Ultimately boosting oil production will lead to greater revenue and we urge the minster to make the necessary revision of the SPT in the 2017/2018 National Budget.” Overall, Am- Cham TT said while Government is on budget at this point in the fiscal year, “this will still require significant deficit financing at the end of this period.” The chamber added that while Imbert said TT is on track to achieve fiscal balance by 2020, “in curtailing expenditure, our hope is that low spend is not linked to an inability to execute or non-implementation of plans and programmes, but rather a result of real savings.”