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THE Opposition strenuously opposed measures proposed by government in the Finance (No 2) Bill, 2022 during debate in Parliament on Friday.
The bill seeks to pass into law several measures stated during the 2022/2023 budget debate.
Mayaro MP Rushton Paray said Clause 4, which amends the Corporation Tax Act to provide for an apprenticeship allowance to a company hiring and paying a young person completing an apprenticeship training programme with that company, would deter companies from hiring young people.
“It would saddle companies with the need for MTA accreditation and paperwork. The measure comes with no working position or context, and should have a policy attached. It should focus on areas which accord with the developmental goals of the country,” Paray said.
The allowance would be equal to 150 per cent of the actual expenditure incurred by a company, up to a maximum of five per cent of the total wages and salaries bill in a year of income.
Paray also took issue with the section of the clause which exempts an approved small company, as defined in the Corporation Tax Act, from payment of corporation tax for six years from January 1. He said while this seems like a good thing, the government would make back the revenue through increased taxes in other areas.
He said the one-time tax credit of $50,000 to manufacturers for new machinery, production lines, or equipment in 2023, was a joke, as these items either cost more than $50,000 or were on back-order and could possibly reach TT after 2023.
He proposed that the period of the tax credit be extended. He said there was a need for government to offer capacity-building support to light manufacturers.
Clause 6 of the Bill would zero-rate VAT on new equipment for a manufacturing company which uses alternative energy technologies and renewable energy options.
Paray said the Finance Minister should ensure the list of technologies and options was comprehensive and companies given adequate support to make the changeover.
He questioned whether the interim pension payment of $3,500 to police and and defence force officers who retire compulsorily, could be taken away if it was found later on that the recipient did not qualify.
“How beneficial is this amount considering the current cost of living? I thought government would want to fix the processing and speed of these payments before making this promise. When will they see this money?
"Will there be a retroactive payment/back pay for those who retired prior to this measure? Those who have passed away, will there be something for their families?”
Paray said incentives offered to the energy sector were too small and larger incentive packages are needed to get oil and gas companies to invest in TT.
Pointe-a-Pierre MP David Lee also took aim at the energy sector measures, which include increasing the investment tax credit from 25 to 30 per cent for companies that invest in mature oil fields, or the acquisition of machinery and plant for use in approved enhanced oil recovery projects;
Decrease the rate of the petroleum profits tax from 35 per cent to 30 per cent; extending the regime for supplemental petroleum taxes (SPT) beyond the financial years 2021 and 2022; and decreasing the base SPT rate from 25 per cent to 20 per cent in respect of petroleum operations in a new field in shallow marine areas where the weighted average crude oil price is between US$90.01 and US$200 per barrel, among others.
Lee criticised government for taking seven years to put these measures in place.
He said while the increase in the investment tax credit is welcomed, the Finance Ministry would have to ensure approvals were given in a timely manner.
Lee said the five per cent reduction would only apply to companies which have production licenses and not those which have production-sharing licences, i.e the majority of companies. He called on government to amend the clause to benefit the latter.
He said raising the SPT, while it raises revenue for the company, could be a deterrent for oil companies investing further in TT.
Lee asked whether these measures were being brought too late and whether the window is closing for this country with respect to oil and gas.
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