Trinidad and Tobago’s main business chambers are calling on the Government to help them save jobs by implementing a tax credit on salaries for companies that do not make any profit over the next three months.
The call was made yesterday, following a meeting of the American Chamber of Commerce of Trinidad and Tobago, Energy Chamber of T&T, T&T Chamber of Industry & Commerce, T&T Manufacturers’ Association and the Confederation of Industry and Commerce on Monday to discuss the effects of the COVID-19 pandemic on local businesses and the wider society.
“With the majority of businesses suffering from a near-total collapse of sales and therefore thousands of individuals facing a fall in income, we appeal to the Government to support the retention of employment through a tax credit on salaries for companies who realise no profits during this period,” a joint release from the chambers said.
“We propose that for each employee that the registered businesses keep on their payroll through the next three months (i.e. April-June 2020), the Government grants an additional tax credit (of between 100%-150%) of the first $6,000 of the employee’s salary. This tax credit can be applied proportionally over a three-year period starting Q3 2020.”
This was just one of five items the chambers deemed critical in the immediate term.
They also called on the Government to defer the payment of corporation tax and Value Added Tax (VAT) for the next three months. This request comes one day after Finance Minister Colm Imbert appealed to people to remember their tax obligations to T&T at this time, since the country will need all the money it can get to manoeuvre through these tough economic times.
On Monday, Imbert hosted a virtual media conference to provide updates on the revenue for fiscal 2020, the Salary Relief Grant and other financial matters. He said the country experienced a shortfall in revenue of $700 million for the first quarter of 2020.
Imbert’s press conference came hours after Prime Minister Dr Keith Rowley revealed stricter Stay-at-Home measures in the fight against CIVID-19, including the closure of all restaurants and reduced opening hours for supermarkets and pharmacies.
“While we understand that this is a tricky issue and directly impacts the Government’s cash flow and therefore ability to cushion the fallout to all sectors of society, we ask Government to still consider a deferral of Corporation Tax and Value Added Tax payments for the upcoming period through June 2020. We believe the temporary cash flow interruption to Government can be managed, in light of the HSF withdrawal and the realisation of virtually budgeted corporation tax receipts in Q1 2020. We also ask for a waiver of penalty interest for late payment of same for Q1 and Q2 of 2020,” the chambers stated yesterday.
“The business groups are, however, appealing to all businesses – large and small – that are able to make these tax payments during this period, to do so. We expect all businesses to continue payment of NIS and Health Surcharge.”
One of the main initiatives that Imbert said the Government would be launching to help those who may lose their jobs during the COVID-19 measures is a Salary Relief Grant. The first phase of the grant covers three months – April, May and June – and can be accessed by citizens who are enrolled on the National Insurance database and have either lost their jobs permanently or temporarily because of COVID-19 measures. The grant is $1,500 monthly and Imbert said 80,000 people are estimated to be eligible. The Government has estimated the grant will cost taxpayers around $400 million. The second phase of the Salary Relief Grant is expected to target the self-employed and those who are not on the NIS system.
The chambers also called on Government to offer support to the self-employed and their employees.
“We propose that the Government extends income support to the self-employed and their employees in the ‘informal’ sector. We recommend this support for the ‘informal’ business owners and their employees at minimum, under the same terms as the salary relief grant to retrenched employees, once these businesses and their employees register with the BIR,” the chambers stated.
“Unregistered businesses could be encouraged to register, possibly through their regional corporations, with the understanding that they will be forgiven for past non-payment of taxes but will be required to pay going forward. Such a move will widen the tax net and assist with the rebuilding of Government revenue once business and social activity return to some level of normalcy.”
The chambers are also asking the Government to launch a National Recovery Fund.
“Based on the substantial excess funds both US$ and TT$ in the banking system, there is an opportunity for GORTT to mobilise these funds and launch a National Recovery Fund denominated in both currencies. Any business or citizen can make a contribution, however small,” the chambers stated.
“There should be some form of incentive by way of deduction for tax purposes over the next 5-10 years at 150 per cent. Ideally, it should not be structured in the form of debt, so as not to impact GORTT borrowing limits and debt ratios. This fund must be kept separate from other funds and overseen by a board made up of reputable private sector and government representatives. It should be used to improve the ease of doing business and for employment generating activities.”
Finally, the chambers called on Government to say what the plan going forward is when it comes to the country’s education system during these trying times.
“Clarity needs to be given on the education system going forward. The Chambers call on the Government to design, clearly communicate and implement a plan to ensure that teaching and learning can resume after April 20th, 2020. The Chambers are willing to work with their members to explore means of supporting this effort,” the chambers said.
“We also commend the many companies who are already doing what they can to minimise the disruption of education. We highlight companies such as TSL and Atlantic for making the Pennacool system more widely available and the myriad of technology companies and service providers who are assisting with implementation of online learning solutions. However, we acknowledge that not every school and certainly not every child will have access to technologically-enabled education and reiterate our willingness to support the education system in bridging these gaps to the extent possible.”
The chambers added, “While we recognise that these measures are but a small part of what needs to be done to bring stability and then get to recovery, we do hope that the Government will consider and implement these measures as we believe they will go a long way in building trust and confidence and give business some minor, but needed relief in the current, very difficult environment.”
Attempts to get an immediate response from Imbert yesterday were unsuccessful as he did not respond to calls to his cellphone nor answer WhatsApp messages.