Soaring Oil Prices Pushes Trinidad & Tobago´s Budget to New Record High

Trinidad and Tobago´s Prime Minister Patrick Manning presented a record $5.5 billion budget which included sweeping tax breaks for middle income earners and a series of public sector projects that raised eyebrows among economists about potential inflation risks.

The new budget included a 5 percent reduction in corporate taxes for larger corporations, higher taxes on the energy sector and a five year tax holiday for small businesses.

Economist and Former Permanent Secretary in the Finance Ministry, Frank Barsotti, said the budget was overly ambitious and much of the objectives would not be achieved because of the limited capacity of the public service to effectively manage these projects.

“It will probably be a good thing if they are unable to deliver all that they have promised, because implementing all those projects in the time frame of only one year would certainly overheat the economy and we will likely see a huge jump in inflation rates over the next two years,” Mr. Barsotti explained

For the tourism sector, the prime minister said government will pump $250 million into the national airline, BWIA International Airways, to recapitalize and overhaul its management structure to make it more competitive, while strengthening corporate governance with a view to divest or merge its operations with other regional airlines.