TTMA: Budget should remove VAT on raw material for manufacturing

Wednesday, September 26, 2018 - 07:15

The Trinidad and Tobago Manufacturers’ Association (TTMA) says it has signaled to the government, through its budget recommendations for 2018/19, the need for the expansion and growth of non-energy manufacturing sector as a priority area for moving the country forward.

“We have listened to the concerns of our members and in this year’s budget submission and have shortlisted and prioritized the areas we believe that can have the most gains for manufacturing to grow,” President of the Association, Christopher Alcazar said in a statement.

He added: “Manufacturers must be able to become more competitive in order to compete on the global scale and grow exports, this takes an environment of productivity which is greatly impacted by government and labour.”

In its submissions to the government, the TTMA asked for the need to address some outstanding matters that it says have been curtailing the growth of the sector.

Alcazar said: “The TTMA emphasizes that the VAT payment issue be addressed as a matter of priority, not only the outstanding payment needs to be addressed, but measures to be put in place that would prevent the build-up of VAT refunds to manufacturers which are currently a major burden on businesses cash flow and stemming investments”.

The TTMA has recommended the removal of VAT on imported raw material for manufacturing and recognition of the VAT debt to start.

The TTMA also requested in its submission to the government that with regard to Property Tax, that consideration should be given to remove discussions on the introduction of such a tax on plant and machinery.

Alcazar elaborated that “to introduce tax on plant and machinery would be a disincentive for investors for growth or retooling of plants, such a move would not be opportune in today’s environment when all hands supposed to be on deck to promote and stimulate investment opportunities, both local and foreign into the country”.

The TTMA is seeking to push and promote non-energy manufacturing and exports so that the sector can not only increase its contribution to GDP and aid in the diversification process, but more importantly, increase production, hire more people and earn its own foreign exchange.

According to Mr. Alcazar, “in this regard we have asked government to consider the introduction of an incremental export allowance framework to encourage private sector risk-taking and investment to grow beyond our shores”.

The TTMA says president intimated that from his discussion with those in authority, the business community can look forward to the rollout of such a framework being announced in the budget for the next fiscal year for immediate implementation after its introduction in the last budget.

The association says it recognizes that we are living in a “new normal” and so expectations need to be curbed.

As such, Alcazar ended by stating that “the request of the TTMA on behalf of its members to the government is not a burden with regard to additional expenditure, rather it is geared to growing the sector and would allow the Government to enhance its revenue stream from more business being generated, more taxes being paid, less burden on the government to provide jobs and allowing the non-energy sector to earn its own foreign currency”.