CMC Financial - Chartered Certified Accountants

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🇹🇹 Fiscal Measures – Budget 2026 (UNC’s Inaugural Budget)

1. Levy on Banks and Insurance Companies

0.25% Asset Levy on total assets of commercial banks and insurance companies.
Expected to raise TT$575 million annually.
Exemptions: Entities under the Special Economic Zones Act.
Policy Rationale: Fair contribution from high-profit sectors; banks criticized for high fees and low deposit returns.

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2. Landlord Business Surcharge

New registration requirement for all landlords with the Board of Inland Revenue.
One-time registration fee: $2,500.

Surcharge:
2.5% on gross annual rental income up to $20,000.
3.5% on gross annual rental income above $20,000.
Expected revenue: $70 million (from registration fees).
Objective: Broaden tax net and formalize the rental market.

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3. Electricity Surcharge

A fixed $0.05 per kWh surcharge on commercial and industrial users.
Exemptions: Schools, hospitals, and street lighting.
Estimated revenue: $269 million.
Goal: Reduce energy subsidies and encourage efficiency.

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4. Increases in Excise Duties, Fees and Charges

Alcohol and to***co duties doubled:
Rum/Spirits: from $79.25 → $158.50 per litre of alcohol.
Beer: from $5.14 → $10.28 per gravity degree.
Ci******es: from $5.26 → $10.52 per pack.
Other increases (effective Jan 1, 2026):
Container Processing: $525 → $1,050.
Customs Declaration Fee: $40 → $80.
Environmental Tyre Tax: $20 → $40.

Revenue impact: $1 billion.

Policy intent: Update outdated charges (some unchanged for 30 years) and improve cost recovery.

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5. Customs Duty on Luxury Electric Vehicles

Duty-free concessions restricted to mid- and lower-priced EVs.
Vehicles with CIF > $400,000 now attract:
10% Customs Duty
12.5% VAT
Tiered Motor Vehicle Tax based on motor size.

Revenue: +$40 million.

Aim: Preserve environmental goals while curbing FX leakage.

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6. Tax on Single-Use Plastics

5% tax on CIF value at importation.

Proceeds earmarked for recycling and waste management programmes.

Effective: Jan 1, 2026.

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7. State-Sponsored Real Estate Investment Trust (REIT)

Creation of a publicly listed REIT to monetize state-owned land and property.

Citizens can invest via shares on the TT Stock Exchange.

Goal:

Unlock capital from idle state assets.
Broaden investment opportunities.
Provide non-debt financing for the Government.

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8. New National Investment Fund (NIF) Bond

TT$1 billion issue in FY2026.
Backed by 21% shareholding in First Citizens Group Holdings Ltd.
Offers tax-free investment for citizens and small businesses.

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9. Higher Penalties for Offences

Fines across multiple laws increased (effective Jan 1, 2026):

Careless Driving: $15,000
Drunk Driving: $15,000
Environmental Tyre Tax Offence: $5,000
Additional revenue: $180 million.

Objective: Strengthen enforcement and deterrence.

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10. Removal of Motor Vehicle Tax Concessions for Returning Nationals

All exemptions revoked (duty, VAT, MVT) due to abuse and fraud.

Effective: Jan 1, 2026.

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11. Adjustment to LPG Subsidy

50¢ per lb increase for LPG cylinders ≥100 lbs.
No change for 20-lb domestic cylinders.
Aim: Reduce fiscal burden while protecting households.

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12–13. National Insurance System (NIS) Reforms

Contribution rate increases:

+3% from Jan 5, 2026
+3% from Jan 4, 2027
Gradual pension age increase:
From 60 → 65 by 2036 (1-year increment every 2 years starting 2028).

Objective: Prevent fund depletion (projected 2033–34) and preserve pension benefits.

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14–19. Social and Developmental Incentives

Measure Description Funding

UWI RDI Fund TT$10M to support applied research $10M
National Innovation & Incubator Programme 100 young entrepreneurs supported $15.75M
Period Poverty Fund Free menstrual kits & awareness programmes $5M
eLEVATE TT Upskilling 15,000 teachers in digital methods $5.72M
NEXTCLASS AI Platform AI-powered teaching tool $4.64M
PEARL Project Early learning & health screening for children $7.89M

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20. Tax Deductions for Contributions to Animal Shelters

Corporations: up to 15% of chargeable profits or $100,000.
Individuals: up to 20% of total income or $20,000.
Recognizes registered NPO shelters under the Non-Profit Organisations Act.

Effective: Jan 1, 2026.

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21. Agricultural Incentives

VAT removal on:

Agricultural machinery, greenhouse & hydroponic components.
Key agricultural chemicals & preparations.
Customs Duty removed on animal feed (poultry, cattle, pig).
Effective: Jan 1, 2026.
Policy goal: Strengthen food security and reduce input costs.

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22. VAT Removal on Basic Food Items

VAT relief reinstated on locally produced and essential foods including: Salt, mauby, coconut water, pumpkin, watermelon, cucumber, lettuce, tomatoes.

Effective: Oct 17, 2025.

Marks a return to UNC’s 2010–2015 policy of broad VAT relief.

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23. Revised Policy on Foreign-Used Vehicles
Import age limits increased:
Private cars (gas/diesel/CNG): 3 → 6 years.
Light commercial vehicles: 7 → 10 years.
Objective: Make vehicle ownership affordable again.

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24. Removal of Tax on Private Pensions
Private pension income now tax-exempt.
Effective: Jan 1, 2026.
Supports retirees and long-term savings.

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25. Removal from Negative List – Construction Materials
Items removed: clay, sand, gravel, limestone, boulders, etc.

Aim: Lower construction costs and spur home ownership and job creation.

Effective: Jan 1, 2026.

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💰 Revenue Impact Summary (Select Measures)

Measure Estimated Annual Revenue

Asset Levy on Banks/Insurers $575M
Electricity Surcharge $269M
Excise Duties & Fees $1B
Landlord Business Surcharge (initial) $70M
Luxury EV Tax $40M
Offence Penalties $180M
Total (est.) ≈ $2.1–$2.3B

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🧭 Fiscal Philosophy

The UNC’s first budget emphasizes:

Equity: Broadening the tax base through fairness (banks, landlords, large consumers).

Protection: Safeguarding households via VAT relief, pension reform, and housing affordability.

Stabilization: Reducing deficit to 2.17% of GDP.

Growth Support: Incentives for SMEs, agriculture, digital transformation, and innovation.

Accountability: Institutional reforms, repeal of TTRA, modernization of IRD and Customs.