Sin taxes up in T&T budget

The government of Trinidad and Tobago hopes to raise $50 million in the next fiscal year through higher taxation on alcohol.

Finance Minister Karen Nunez Teshiera announced the increased taxes Monday when she presented the budget in Parliament.

She said the excise duty on locally manufactured rum, beer and other alcoholic products will go up by 15 per cent. The same amount applies to import duty on rum, beer and other alcoholic products of Common Market origin.

However import duties on rum, beer and other alcoholic products from extra regional sources will increase by 30 per cent. The new taxes are already in effect.

Tobacco products will also face higher taxation, starting Tuesday morning. The excise and import duty on tobacco products of Common Market origin and the tobacco tax on extra-regional tobacco products, will all go up by 15 per cent.

Other fiscal measures include a stimulus package for contractors to promote the productivity and competitiveness of small and medium enterprises.

The plan is to stimulate the construction sector by subcontracting its infrastructure works to small contractors for building and refurbishment government properties. These include Community Centres, Schools, Early Childhood Care Centres, Police Stations, Recreation Centres, Health Centres and City/Borough sidewalks.

The plan is for a 30 per cent mobilization fee to contractors to assist in the initial purchase of materials and services.

The government will also expand its "Fair Share Programme", which contracts to small entrepreneurs to stimulate the small and micro enterprise sector. The minister said her government will expand the value of public sector from $1 million to $5 million dollars, with effect from October 1, 2009.

It also plans to retool the manufacturing sector to include all manufacturing activities to strengthen the efficiency and competitiveness of local industry through the acquisition of state of the art technology and the improvement of existing plant capacity.

"It is proposed therefore to increase the initial allowance relating to machinery and plant from 75 per cent to 90 per cent from January 1, 2010.

In addition the government plans to amend the Corporation Tax Act to allow approved property development companies to claim as a deduction 15 percent of the capital expenditure incurred in the construction of commercial or industrial buildings where construction starts on or after October 1st 2009 and completed on or before December 31, 2014.

There are also changes in motor vehicle penalties and fees.

The minister said the measure is aimed at maintaining "order and safety on our nation’s roads and to deter road traffic offenders".

The targeted offences include:

• Use of a vehicle without park lights
• improper overtaking on the left side of the road
• overtaking traffic at a place dangerous to do so
• exceeding the specified speed limit

Each of these will carry a fixed penalty of 1,000, up from $200. The unauthorized use of the Priority Bus Route will carry a fixed penalty of $2,000 as would illegal tints on vehicles.

The minister said a fixed penalty of $2,000 will also be applied to motor vehicles that are not fitted with seat belts.

The government also plans to introduce legislation to make the use of child restraints mandatory for children five years of age and under.