Trinidad and Tobago’s National Budget, which was presented on Monday by Minister of Finance, Colm Imbert, contained new measures to help revive the country’s oil and gas sector.
An impending major development is a review of T&T’s fiscal regime to garner more oil investment.
Calls had mounted – especially from T&T’s Energy Chamber – for the government to review the energy taxation regime so that the country can remain competitive, especially with growing competition from Guyana and Suriname.
“If investors believe that the balance between risk and reward is unfavourable, i.e. that the taxation regime is skewed in favour of the Government, not “fair” or not economically feasible, or that the Government may capriciously reverse incentives and eliminate tax concessions, they will simply not participate,” Mr. Imbert noted.
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Now, a “comprehensive review” of T&T’s oil and gas taxation regime is set to take place and will be conducted by the Ministry of Finance and the Ministry of Energy and Energy Industries to ensure that the Twin-Island Republic remains an internationally competitive hydrocarbon province.
The finance minister announced that T&T will also be reviewing the necessity of its three main petroleum taxes – Petroleum Profits Tax (Corporation Tax), Supplemental Petroleum Tax and Royalty – both onshore and offshore, in the deep water and shallow water, and for large and small producers.
He said, too, that the government will be examining the relevance of T&T’s existing suite of fiscal incentives, licensing regimes and production sharing contracts to give investors “motivation” to bid for blocks and explore and produce oil and gas, all while ensuring T&T citizens get their fair share of revenues from the natural resources.
T&T’s oil and gas sector has seen better days; and for this reason, the government’s measures were quickly praised. The Energy Chamber in a statement said it welcomed the commitment from Mr. Imbert.
“There are also details of the announced proposals that will be important to clarify and get right if we are to meet the objective of encouraging investment in new oil production,” the Chamber pointed out.
T&T’s 2022 budget was presented on the heels of comments by Prime Minister Dr. Keith Rowley that the country’s budget arrangements would be “extremely challenging and dire” without the earnings from oil, gas, and petrochemicals.