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  • 5 weeks ago
Economist and Independent Senator Dr. Marlene Attz is sounding a note of caution on several of the Government's new fiscal measures.


Speaking at a post-budget forum hosted by the University of the West Indies, she questioned the practicality and possible fallout of some key proposals.
Transcript
00:00Economist and independent senator Dr. Marlene Atts is raising concerns about several of
00:06government's new budget measures. At a post-budget forum hosted by the University of the West
00:13Indies, she questioned the practicality of the proposal to have landlords register with
00:19the state and pay a one-time registration fee, an initiative from which government expects
00:25to earn some $70 million. It requires landlords to voluntarily go into the Board of Inland Revenue
00:32and to register themselves. And I'm too sure I've seen that happening. All right, that I will now
00:39go and declare to the government that I'm earning all of this extra income because I'm pretty sure
00:44when those persons were visited by persons, representatives from the Ministry of Finance
00:50for the property tax, they probably didn't declare that they were actually renting out parts of their
00:53homes. So I really don't see it happening that persons will volunteer. So there is no single
00:58owner registry. Many of the rentals that we have in Toronto be going formal.
01:04Under the proposed system, once established in law, landlords earning $20,000 or less per month
01:11would pay the state 2.5% of their annual rental income, while those earning above that threshold
01:18will pay 3.5%.
01:21I think there's some hidden costs in that because what is likely to happen is anything that happens
01:27to increase the costs associated would likely pass through and you might find yourself paying higher
01:33rents or there might be fewer rent concessions for tenants. And it certainly impacts our student
01:40population, those of you who rent, because your landlord is going to have to voluntarily
01:44declare that they're renting to you and then decide to voluntarily pay this surcharge, which to my
01:51mind, they probably will pass on. So some of the challenges I see with that.
01:55Dr. Atts described the concept as complex and potentially burdensome for some landlords.
02:02It's going to be a burden on those small landlords. So I might be a retiree, I might be suffering from
02:08emptiness syndrome, all of my children might have migrated and gone away or gone on to their lives in
02:12other places. So I decided to rent a room as my, you know, supplementary income in case something
02:21happens to me. I now have to go and declare that. So I think that there is going to be a challenge in
02:26terms of enforcement.
02:27She also weighed in on government's proposed asset levy of 0.25% on banks and insurance companies,
02:35which is projected to raise $575 million in revenue annually.
02:42Banks and insurers may offset this additional taxes levy that they have to pay by higher fees,
02:50by raising their deposit rates or higher loan premiums, simply making it difficult to access
02:55credit. So there might be a tightening of credit and particularly I'm concerned the tightening of
03:01credit to SMEs. And SMEs usually are in any event challenged to meet all of the requirements.
03:07And this may add an additional layer in terms of the bureaucracy.
03:11Turning to wages, Finance Minister Davindranath Tanku has pledged to begin settling outstanding
03:17public service wage negotiations, starting at a 10% increase.
03:23Government has to incur higher recurrent costs. Government is the largest employer of public servants,
03:28government. So the government is going to incur higher recurrent costs to the tune of just over
03:32$200 million annually. But also the back pay, the arrays will probably be in the tune of $730
03:39million. So what does that mean? Yes, it's a promise that was made and a promise that the government
03:45intends to keep. But it means that it adds to the fiscal type space, the very tight fiscal space that
03:52we have in Trinidad and Tobago. It adds to the government's bill.
03:55However, Dr. Atts cautions that this increase could push some public sector servants into higher
04:02tax brackets. She also advised motorists to be cautious when buying older vehicles as the new
04:08fiscal measure proposed extending the age limit for importing foreign use private vehicles from three
04:15to six years. It might actually cost you more a few months after. But older vehicles typically have
04:23high emissions and maintenance challenges. Of course, the vehicle population on the road is going to be
04:30increased. We already have a challenge in terms of traffic congestion, potholes, pollution coming from
04:38vehicles. Dr. Atts added that the increased demand for foreign use vehicles could further strain the
04:44country's foreign exchange reserves.
04:46Arvashi Tawari, Rupnarein, TV6 News.
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