Reduction in Individual Income Tax
The lower band (up to $50,000
chargeable income) has been reduced from 28% to 25% and the upper band (greater than $50,000 chargeable income) from 35% to
30% effective January 1,2003.
Reduction
in Corporation Tax
The Corporation Tax rate will
be reduced from 35% to 30% effective January 1, 2003. This reduction does not apply to the Petrochemical and related sectors.
3. Removal of Export Allowance
In compliance with the dictates
of the World Trade Organisation, the Export Allowance under the Corporation Tax Act has been removed effective January 1,
2003.
4. Removal of Customs duty and VAT from Pharmaceuticals
The removal of Customs duty and
VAT from medication takes place with immediate effect.
5. VAT on Services provided to Foreign Recipients
The VAT Act is to be amended
so that only services that are physically performed outside Trinidad & Tobago and
o are supplied to a non-resident
recipient
o who is outside Trinidad & Tobago when the service is performed can be classified as zero-rated.
Where services are performed
o in connection with land or any
land improvement in Trinidad & Tobago
o to movable personal property
situated in Trinidad & Tobago at the time services are performed
VAT will be charged at 15%
effective January 1, 2003.
6. Increase of Motor Vehicle Tax on Roll on-Roll off vehicles
The existing Tax Bands have been
reduced from six to one. All fully assembled foreign vehicles regardless of age will be subject to 75% of the
Motor Vehicle Tax payable on the registration of a new vehicle, effective January 1, 2003.
7. Increases in taxes payable on Gambling Tables and Other Devices
A 200% increase in Gaming Taxes
payable on the gambling activity carried on at Private Member Clubs, with immediate effect.
ALLOWANCES
Credit Union tax deduction
Individuals will be granted a
deduction of up to $10,000 per annum in respect of shares bought in a Society registered under the Cooperatives Society Act,
effective January 1, 2003.
9. Housing Allowance
A Housing Allowance
of $10,000 per year for five years has been granted to first time homeowners who purchase their own homes on
or after January 1, 2003.
10. Expenditure on Sports and Culture
o An
allowance of 150% of the actual expenses incurred up to a maximum of $450,000 in respect of companies promoting/sponsoring
Sporting Activities and Sportsmen who are nationals of Trinidad & Tobago is to be granted effective from January 1, 2003.
o Companies involved
in sponsoring local Cultural, Educational and Entertainment Productions that broadcast to local, regional and international
audiences will be given an Allowance of 150% of the actual expenses incurred up to a maximum of $450,000.
o Production Companies that produce
local Cultural, Educational and Entertainment Productions that broadcast to local, regional and international audiences will
be given an Allowance of 150% of the actual expenses incurred up to a maximum of $450,000.
CHANGES
IN THE OPERATIONS OF THE BOARD OF INLAND REVENUE
· Time period for VAT Audit
The time
limit for the BIR to raise a VAT Audit is six years after the end of the Tax Period. This Period has been extended to: within
six years of the end of the Tax Period to which the assessment relates, or within three years of the date of filing of the
Return, whichever is the later.
This measure
will allow the BIR more time to assess those companies that file VAT Returns just prior to the end of the six year assessment
period and is effective January 1, 2003.
Insurance Industries and Financial Institutions
Effective
January 1, 2003 power will be delegated to the BIR to
o Refund
or remit Insurance Premium Tax
o Waive
or reduce interest on outstanding payments of Insurance Premium Taxes/Penalties
o Audit
Insurance Companies and Financial Institutions
These
measures should speed up any delay in handling these items
· Health Surcharge
o Penalty payable
for the late remittance of Health Surcharge has been increased to be in line with that of PAYE to 100%.
o Interest payable
for late payment is similarly increased from 15% to 20%.
· Refund of Pension Contributions and Deferred
Annuities
o Taxes on Refunds
of Pension Contributions and Deferred Annuities are to be due on the 15th day of the month following which the
tax was deducted.
o In addition Penalty
and Interest are imposed at the rate of 100% and 200% respectively.
· Filing of Income Tax Returns
Currently an
Individual who is only in receipt of emolument Income is not obligated to file an Income Tax Return. Effective January 1,
2003, the BIR can require such persons to file tax returns.
· The BIR will be empowered to
o Waive or reduce the interest
payable for the late remittance of PAYE (as well as penalties payable as currently exists)
o Waive or reduce the interest
payable for the late remittance of Health Surcharge
o Waive or reduce the penalty
for late filing of returns for Individuals and Companies
o Waive or reduce interest
accruing in respect of outstanding balances on Installments of Tax
THE GREEN
FUND
This fund has been the subject of much criticism. It is currently
being reviewed and one proposal under consideration is the harmonization of the Green Fund and the Environmental Trust Fund
so that both are managed by the Trustees of the Environmental Trust Fund.
11. Guest House Allowance
A Capital Allowance
of 100% of the cost of Building Materials in respect of approved Capital Expenditure incurred by the owner or operator in
the conversion of Existing Homes to Guest Homes.