PORT-OF-SPAIN – The government of petroleum-rich Trinidad and Tobago said on Tuesday that it expects revenue to decline as a result of a drop in global prices for crude and natural gas.
Finance Minister Colm Imbert told Parliament the shortfall this year could reach $370 million if oil prices remain in the neighborhood of $40 a barrel.
“This dramatic energy price shock, combined with a steady reduction in domestic production, is having a debilitating impact on our fiscal and external accounts and there will be spill-over effects on level of economic activity and employment,” he said.
Imbert said tax revenue from the energy sector averaged 16 percent of gross domestic product over the period 2010-2014 before falling to 11 percent of GDP in 2015.
On current projections, the minister said, the take from levies on production of oil and natural gas will decline to 7 percent of GDP.
The administration’s Finance Bill seeks to reform value added tax and boost the personal allowance for low-income workers, he said.
But though the legislation also calls for trimming the VAT rate from 15 percent to 12.5 percent, it would not result in lower gas prices, the minister said
“Instead we will adjust the duty on petroleum products so that the prices at the pump will remain the same as announced in the national budget,” Imbert said.