The Trinidad and Tobago government Monday presented a budget of TT$63.3 billion (One TT dollar=US$0.16 cents) to Parliament saying the fiscal package is intended to attract investment, expand production, create employment, strengthen resilience and open new opportunities for citizens and businesses.
In a two and a half hour presentation to Parliament, Finance Minister Davendranath Tancoo said that the budget is based on the assumption that the price for oil is US$77 per barrel compared with US$73.25 per barrel in 2026 and that natural gas price assumption will be US$5.00 per MMBtu, compared with US$4.25 per MMBtu in 2026.
He said as a result of these commodity price estimates, the government expects total revenue TT$59.729 billion, total expenditure of TT$63.368 billion with a fiscal deficit of TT$3.639 billion.
Debate on the budget begins on Friday.
Tanco told legislators that the total estimated revenue comprises: oil revenue of TT$14.355 billion, non-oil revenue of TT$45.062 billion and capital revenue TT$ 0.312 billion
‘It should be noted that the fiscal deficit of TT$3.639 billion is 2.1 per cent of GDP (gross domestic product), again within the international benchmark of three per cent,’ Tancoo said, adding that education and training will receive the biggest slice of the budget estimated at TT$8.033 billion, followed by health at TT$8.061 billion and national security at TT$7.321 billion.
Tancoo told legislators that the government will introduce a limit on carried-forward losses for general trade and business as it seeks to raise revenuer and protect the tax base.
‘Our tax system must strike a balance between supporting business activity and ensuring that profitable enterprises make a fair and timely contribution to the revenues required for our national priorities.’
Tancoo said currently, businesses may carry forward accumulated losses to reduce taxable profits in subsequent years.
‘While the Government recognises the importance of this provision to allow businesses to recover from periods of financial difficulty, we also believe that there should be an appropriate balance in the amount of accumulated losses applied in any one year.’
He said as a result, he is proposing to limit the utilisation of carried-forward losses for all businesses to 75 per cent of chargeable profits in any income year and that this measure, which takes effect from January 1 next year, will contribute TT$430 million.
He said that the unemployment levy has been unchanged at five pe cent since 1989 and that over that period, the needs of the workforce and the economy have evolved considerably.
‘To ensure that we have adequate resources to support workers and strengthen their development, I propose to increase the unemployment levy on the taxable profits of petroleum companies from five to eight per cent’ he said, adding that this would generate an additional TT$155 million in revenue.
The government is also proposing an increase to the withholding tax on distributions made to non-resident individuals and companies from eight to 10 per cent, while the rate on distributions to non-resident parent companies will increase from three to five per cent.
Tancoo said that the measure will generate an additional TT$25.1 million and that the government has reviewed the effect of the increase in excise duties on alcoholic beverages with the objective of achieving a fairer balance between supporting local production, ensuring consistent treatment of imported products and maintaining an appropriate contribution to the revenues of the state.
‘I propose to reduce the applicable excise rates by 25 per cent. These revised excise rates will be extended to imported alcoholic beverages, establishing a more consistent excise treatment between locally produced and imported products.
‘We will also reform the customs duty structure on imported alcoholic beverages by moving from the existing specific duties charged by volume to an ad valorem rate based on the value of the product. This will affect imported alcoholic beverages which do not benefit from preferential customs treatment under Trinidad and Tobago’s existing trade agreements, with higher-value imports bearing a higher amount of customs duty.’
Tancoo said that these measures will provide some relief to local manufacturers, establish greater consistency in the application of excise duties and create a more appropriate customs duty structure for imported alcoholic beverages. He said these measures will take effect from January 1, next year.
Tancoo told legislators that much of the digital services consumed in Trinidad and Tobago are supplied by businesses located outside of the country’s borders and that these entities do not contribute to our country’s income.
‘Accordingly, the government proposes to apply VAT (value added tax) to digital services supplied by non-resident providers to persons in Trinidad and Tobago,’ he said, adding that to facilitate compliance and collection, a simplified registration will be introduced for non-resident suppliers, including suppliers of taxable services connected with real property situated in Trinidad and Tobago, allowing them to register, collect and remit VAT electronically.
‘This measure will broaden our tax base, strengthen the collection of VAT and promote more consistent tax treatment between services supplied from abroad and those supplied domestically,’ he said, predicting that the measure will generate TT$18 million in revenue and takes effect on March 1, 2027.
Tancoo also announced that the government intends to amend the definition of ‘Payments’ within the Income Tax Act. He said under the existing withholding tax framework, the treatment of certain payments to non-residents depends on whether the payment or underlying income arises in Trinidad and Tobago.
Tancoo said that this creates circumstances in which services supplied remotely to Trinidad and Tobago businesses fall outside the withholding tax net.
‘I propose to amend the Income Tax Act to clarify the circumstances in which payments for management, technical and other prescribed services to non-residents will be treated for withholding tax purposes. The amendment will consider where the obligation to make the payment arises and where the relevant cost is incurred. This measure will close a legislative loophole and protect our country’s tax base.’
Tancoo said that the measure will generate TT$300 million in revenue and takes effect on January 1, 2027 and that the Income Tax Act will be further amended to disallow a deduction for expenses incurred in earning exempt income:
He said at present, expenses incurred in earning exempt income may, in certain circumstances, be deducted in determining taxable income. This can reduce the tax payable on other income, although the related income is itself exempt from tax.
‘To address this inconsistency and strengthen the integrity of our tax system, I propose to amend Section 10 of the Income Tax Act to expressly disallow deductions for expenses incurred in earning exempt income’ Tancoo told legislators adding that this amendment will provide greater clarity and consistency in the tax treatment of exempt income, while ensuring that tax concessions operate as intended.
He said that this measure, which takes effect from the start of next year, is expected to generate TT$75 million in revenue.
The government is also amending the Tobacco Control Act to provide clearer rules for the commercial possession and importation of cigarettes.
He said possession of 10,000 or more tobacco products will now constitute prima facie evidence of distribution, while the importation of 800 or more cigarettes will require an appropriate import licence.
‘Government will also bring all vaping products within an appropriate regulatory framework. Vaping in public places and the sale of vaping products to persons under the age of 21 will be prohibited’ Tancoo said, adding that he proposes to establish a 20 per cent rate of customs duty on vaping devices and products.
The government said it is developing a niche industry around the collection, restoration and preservation of historic motor vehicles, creating opportunities for skilled trades and specialised services while supporting automotive shows, cultural events and tourism.
‘We will establish regulations for the importation, registration and use of Classic, Antique and Vintage motor vehicles, including import controls and differentiated rates of Motor Vehicle Tax.
Under the new arrangements, the rate of Motor Vehicle Tax will increase by 100 per cent for Classic vehicles, 50 per cent for Antique vehicles and 25 per cent for Vintage vehicles.’
The government said it is promoting energy conservation and supporting low-usage households introducing an electricity surcharge of five cents per kilowatt-hour on residential consumption above 3,000 kilowatt-hours per billing period.
‘This threshold will ensure that average households with moderate levels of electricity usage remain unaffected,’ the Finance Minister said, adding that the revenue generated from this surcharge will help finance the existing electricity subsidy provided to households with very low levels of electricity consumption.
Government said this measure is expected to generate an additional TT$17.8 million in revenue.
The Kamla Persad-Bissessar government has announced an increase in personal allowance for pensioners.
Tancoo said that in fiscal 2026, the government provided meaningful relief to thousands of senior citizens by making their private pensions tax-free.
‘However, many pensioners, particularly retired public officers, remain subject to tax on pension income exceeding TT$90,000. Our public officers have given decades of service to this country and deserve greater financial security in retirement. I therefore propose to increase the personal allowance for pensioners to TT$102,000 per year,’ Tacoo said, adding that this measure will provide approximately TT$11 million in tax relief to pensioners as of January 1,next year.
Tancoo said that the government intends to modernise tax administration and strengthening compliance and that it has carefully considered the recommendations arising from the recent review of the VAT system.
‘The review makes a strong case for simplifying the VAT system, reducing the extensive use of zero-rating and broadening the VAT base. These reforms can strengthen revenue collection, improve the administration of VAT and reduce some of the pressures associated with VAT refunds.’
Tancoo said that the government is committed to preserving price stability and avoiding measures that could place unnecessary pressure on household prices.
‘We will therefore preserve zero-rating on selected basic and essential items, while moving selected items from zero-rated to VAT-exempt status. I wish to emphasise that these goods will continue to attract no VAT at the point of sale.’
The government is also introducing a VAT clearance fee with Tancoo saying that at present, a fee of TT$100 applies to a standard Tax Clearance Certificate, while there is no cost for a VAT clearance certificate.
He said he will introduce a fee of TT$100 for the issuance of a VAT Clearance Certificate and that the measure will provide an additional TT$500,000 in revenue and will take effect from January 1, 2027.
‘While penalties currently apply for the non-filing of Income Tax and Corporation Tax returns, there is no comparable penalty for the non-filing of VAT returns. To address this gap and strengthen VAT compliance, the government will introduce a penalty of TT$100 for every two months that a VAT return remains outstanding.
‘This measure will encourage timely filing, strengthen VAT administration and improve the information available to support revenue management and economic planning.
Tancoo said, adding that the measure will provide an additional five million dollars in revenue.
The government said it will introduce mandatory electronic filing through the Inland Revenue Division’s GENTAX system for all taxpayers, saying that this measure represents an important step in the modernisation and digital transformation of tax administration in Trinidad and Tobago.
It said GENTAX will provide all taxpayers with a single, streamlined and more efficient platform through which they can meet their tax obligations without having to manually file returns.
Tancoo said to strengthen compliance and deter all false Customs declarations, he proposes to increase the penalty under the Customs Act from TT$125,000 to TT$250,000.
The government also said that there wuld be an increase in the Foreign Currency Declaration Threshold, noting that the existing US$5,000 foreign currency declaration threshold places a reporting requirement on travellers at a relatively modest level.
‘Government considers that this threshold should now be updated to better reflect present-day travel and commercial realities, while allowing Customs to remain focused on higher-risk movements of currency.
‘Accordingly, I propose to increase the foreign currency declaration threshold from US$5,000 to US$10,000. This threshold is also consistent with the benchmark used in a number of jurisdictions.’
Tancoo also announced an amendment to Registration of Clubs Act to provide greater flexibility and encourage timely compliance. He said he proposed to amend the legislation to allow registered members’ clubs to pay their taxes on a quarterly basis, rather than annual, basis.
The Finance Minister sad that there would be an increase in the penalty for non-payment of National Insurance Contributions with employers neng responsible for ensuring that National Insurance contributions due for their employees are paid.
He saif failure to do so compromises workers’ contribution records and, ultimately, their access to National Insurance benefits.
‘I therefore propose to strengthen the penalties for employers who fail or neglect to pay the required National Insurance contributions. The maximum fine on summary conviction will increase from TT$4,000 to TT$8,000.
Finance Minister Davendranath Tancoo delivering the 2026-2027 national budget to Parliament on Monday (CMC Photo)
Tancoo said that to improve the ease of doing business government proposes to amend the Foreign Investment Act by simplifying the rules for foreign acquisition of land and shares, including transactions up to US$100,000 in total. He said CARICOM nationals will be exempted from the consideration rule.
‘I propose to introduce a legal requirement for beneficial ownership information disclosure from foreign investors, and streamline administrative processes to reduce unnecessary delays. These reforms will make the foreign investment process faster, simpler and more transparent while also strengthening regulatory oversight.’
Tancoo said the government proposes to make targeted amendments to the Exchange Control Act to clarify the existing arrangements governing the importation and exportation of foreign currency notes. They will also require authorised dealers to provide full disclosure to the Central Bank concerning movement of cash.
He said the government will launch a Government Savings Bond Programme, creating a new and accessible avenue for citizens to invest directly in securities issued by the government of Trinidad and Tobago.
‘The programme is designed primarily with individual citizens and small savers in mind, allowing persons to invest amounts such as TT$1,000, TT$5,000, TT$10,000 or more. We intend to offer these bonds with a fix rate of interest, in both Trinidad and Tobago and United States dollars and with various tenors.
‘These bonds will provide citizens with an additional investment opportunity, offering competitive returns while helping them build long-term financial security. They will also deepen the local capital market, broaden investment options, and importantly, provide a domestic avenue for US dollar savings. ‘
The government is also moving towards introducing a Retail Government Securities Programme that will place government bonds within the reach of ordinary citizens.
‘For too long, investment in Government securities has been concentrated among institutional investors and financial institutions. We intend to change this by offering securities in smaller denominations, including investments from as little as TT$5,000, allowing teachers, nurses, young professionals, small business owners, pensioners and first-time investors to participate directly in one of the country’s safest and most important investment classes. This initiative is about empowering citizens to save, invest and build personal wealth.’
Tancoo said that the programme will be supported by the government’s move towards the dematerialisation of government securities, replacing paper certificates. He said the securities will be recorded electronically through the Trinidad and Tobago Central Depository and will be listed on the Trinidad and Tobago Stock Exchange, with trading facilitated through licensed brokers.
Tancoo said to develop the local capital market, the government will engage an international partner to conduct a diagnostic on Trinidad and Tobago’s Government Local Currency Bond Market.
‘Following the completion of this diagnostic, this Government will produce a sequenced reform roadmap which will be incorporated into the Ministry of Finance’s cash and debt management framework. This will support improved planning, cash-flow forecasting and the development of a deeper and more effective yield curve,’ he added.