00:00The 2027 budget is introducing a number of changes to the tax system that could affect
00:05both consumers and businesses. And Ernst & Young Trinidad is warning that the implications extend
00:11beyond the revenue the government expects to collect. One significant proposal is to bring
00:17digital services supplied by non-resident providers to people in TNT within the VATnet.
00:23E-Wife says, quote, the specific categories of services to be covered have not yet been defined
00:29however, based on similar legislation introduced or proposed to be introduced in the Caribbean region
00:36we expect that it will include items such as digital content, subscriptions, cloud services,
00:42web hosting, online advertising and associated charges, end quote. Overseas suppliers will be
00:48required to register under a simplified system, collect VAT and remit it to the state. E-Wife says
00:54the success of the measure will depend on whether international platforms comply
00:59and suggests a reverse charge mechanism could also be considered for business-to-business
01:04transactions. The review raises another concern over the proposed conversion of selected zero-rated
01:11goods to VAT-exempt status. While the change is intended to reduce VAT refund claims and improve
01:18administration, E-Wife warns that businesses could lose the ability to recover VAT paid on related inputs,
01:24saying, quote, consumers may see no VAT charge but suppliers generally lose the ability to recover
01:30VAT, end quote. The distinction could have consequences for prices. If businesses, it says,
01:37can no longer recover the VAT on their inputs, the unrecovered tax becomes a cost of doing business,
01:43one that could ultimately be passed on to consumers. E-Wife says the overall effect will depend on which items
01:50are
01:50eventually designated as exempt, while businesses making both taxable and exempt supplies could
01:56also face more complicated VAT calculations. On alcohol, the government is proposing a different
02:02approach, a 25% reduction in excise duty rates effective January 1, 2027. Under the proposal,
02:11the excise duty on bear and stout would fall from $10.28 to $7.71 per liter. The rate on
02:20more beverages would
02:21drop from $0.52 to $0.39 per liter. The proposed reduction also covers rum, whiskey, brandy, gin, vodka,
02:29sparkling wine, and other spirits. But the changes do not stop at excise duty. The government is also proposing to
02:36move
02:36customs duties on imported alcoholic beverages from a specific duty system to an ad valorem system,
02:44meaning the duty would be calculated according to the value. Households with high electricity
02:49consumption could also face an additional charge. From January 2027, the government proposes a surcharge
02:56of $0.05 per kilowatt hour on residential consumption exceeding 3,000 kilowatt hours per billing period.
03:04EY estimates that the measure could generate approximately $17.8 million in additional revenue.
03:10It says, quote, consideration could also be given to measures that facilitate household investment
03:16in energy-efficient technology. This could complement the surcharge by providing consumers
03:22with practical options to manage electricity costs and to reduce their reliance on subsidized electricity
03:28while supporting TNT's broader energy transition objectives. End quote.
03:34Ravashita Wari Rupnarein, TV6 News.
