The Chamber’s Pre Budget Panel Discussion

The Trinidad and Tobago Chamber of Industry and Commerce hosted its first Pre-Budget Panel Discussion with a view to starting the national conversation on the budget before it is presented.  The Chamber was privileged to have three respected panellists to propose recommendations on the key areas identified by the Ministry of Finance as the framework for this year’s Budget, that is, building the growth momentum, deepening social cohesion and revenue mobilization.

Successive governments have proposed initiatives such as the seven sectors for diversification and more recently the five growth poles for expansion, allowing for the opening of new economic spaces.  However, the strategies have, for the most part, been vague and have therefore elicited a “wait-and-see” response from the business community.  As such, the anticipated results have not been realised.

Several recommendations were put forward at this session, however, given the time constraints, I will focus on just a few.  One proposal that was well received is the marketing of T&T as a retirement haven.  This will involve incentivizing ‘baby-boomers’ from the US and Europe – who are among the world’s richest – to spend their post-retirement years in T&T. This strategy is a net foreign exchange earner and has positive spinoffs in (inter alia) the real estate market, the entertainment industry and for commercial activity as a whole.

In addressing the area of social cohesion in the upcoming Budget, the Minister of Finance needs to ensure that gender issues, are integrated into policy planning and development.  There also needs to be greater investment in women, who are holding their own as entrepreneurs, but who do not have equal access to funding.

Going forward, it is proposed that the Government engage in participatory budgeting.  This will take the form, initially, of a multi-partite pre-budget policy roundtable early in the new fiscal year.  Out of these discussions a budget working group should be formed which would make a first draft of its recommendations available for comment by all relevant stakeholders long before the Budget reading.  The working group would be charged with the mandate to forward recommendations on how best to promote the efficient use of the country’s resources and also to develop tools to track government’s revenue and expenditure.

On the critical issue of revenue mobilization, arising from the recent tax amnesty there was a dramatic improvement in the accuracy of the BIR internal system and improved intelligence.  There had been some delay in the processing of VAT refunds and an increased allocation was made to the BIR for clearing some of the backlog. The Chamber proposes that further attention be paid to this area for sustainability.

We reiterated the need for a tax issues committee to be set up with full stakeholder participation.  This is imperative for future sustainable development of well thought out tax policy, among other things.

The Chamber has already submitted recommendations to the Ministry and is optimistic that due consideration will be given to its proposals in the framing of the 2011/2012 Budget.

We look forward to the reading of this budget and a lively discussion in the Chamber’s Post-Budget Meeting the morning after the presentation of the budget.