Imbert: $1.76B for VAT payments owed to businesses

Some $1.76 billion of the $3 billion budget variance being sought by the Government will be used to pay out VAT payments owed to businesses.

Finance Minister Colm Imbert on Monday detailed the allocations during his presentation of the Mid-Year Budget Review and said the payments of the VAT owed to the private companies will help improve the economy.

“We think this would go a long way in assisting businesses with cash flow, with funds to allow them to continue their operations, to allow them to expand their businesses, create jobs, to stimulate economic activity,” Imbert said during his presentation.

He also listed several heads of Government who will be using the additional allocation to pay off arrears to public utility companies like the T&T Electricity Commission (TTEC) and Telecommunications Services of T&T (TSTT).

In addition, he said some $500 million in surplus sale from petroleum fuels in 202 will be used to subsidise the price of Liquid Petroleum Gas (LPG) or cooking gas.

Imbert said this was one area in which the extra revenue was “going and money was being spent.”

“The surplus generated from the sale of petroleum fuels will be utilised in part to deal with the continued subsidy of LPG or cooking gas, which is a significant amount,” he said.

The Minister said the LPG subsidy consumed “hundreds of millions per year” and the money will go towards settling the arrears owed to the National Petroleum Marketing Company Limited and applied to the subsidised LPG for the rest of the fiscal year.

In terms of dealing with bills, Imbert said there were “significant sums allocated to deal with arrears in terms of the security services, janitorial services, telephone bills, electricity and water bills of several ministries.

“The amount with respect to those arrears is of the order of $600 million,” he said.

“So contained within this $3 billion supplementation is the amount of $600 million to deal with arrears for rent, water, electricity, telephone, janitorial and security services.”

Imbert gave the breakdown for the arrears in each of the categories for heads who will receive money.

The Judiciary will expand its services and requires an additional $30.3 million to facilitate payments to contract workers.

The Industrial Court, he said, needed an additional $7.9 million required to pay travelling and allowances, electricity, telephone bills and rent. It will also be used to pay its debt to Nipdec for its management services, as well as to meet janitorial services up to September 2022.

Parliament will receive an additional $4.1 million for the payment of gratuity.

“There is a constant theme coming through in that in this supplementation, we intend to deal with long-standing, outstanding arrears to TTEC to WASA to TSTT,” he said.

The Elections and Boundaries Commission (EBC) will get $23.5 million to offset costs to pay staff compiling electoral lists and monies owed to TSTT for arrears and those on short-term contracts.

He said the Office of the Prime Minister needed an additional $59.96 million to facilitate the fees for the Commission of Enquiry in the Land Acquisition process for the Solomon Hochoy Highway expansion, payments to the National Security Council Secretariat and outstanding payments to TSTT and T&TEC.

The Children’s Authority will also get a large cut of this allocation, receiving some $22.4 million, while some of the children’s homes will also receive additional funding.

The Tobago House of Assembly (THA) will receive some $60 million to pay an overdue debt of $27.8 million to the National Helicopter Service and arrears owed to T&TEC in the sum of $19 million.

The Ministry of Finance will receive some $225.96 million to enable payments to the Ministry of Trade and Industry to pay VAT and other payments associated with the Phoenix Park Industrial Estate, including claims made by the contractors for the COVID-19 delays.

“The Ministry of Finance will also be facilitating the acquisition for the Ministry of National Security for use by the Immigration Division, a property located on St James Street, in San Fernando, to accommodate the south office,” he said.

Imbert said that the space was previously occupied by TSTT.

Outside of this investment, the Ministry of National Security will also be getting some $206.9 million to cover shortfalls in allocations for the fire services and prisons.

Outside of the windfall from owed payments, the public utilities will receive $408 million, with $68 million allocated to street lighting and to pay refunds to those who qualify for the electricity rebate.

“And to continue to subsidise WASA in the amount of $328 million,” Imbert said.

Some $59.5 million is also allocated to improve the transmission structure at Union Estate, Gandhi Village. Back in February, a failure at that substation triggered an hours-long islandwide blackout.

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