THE EDITOR: The government is poised to dip into the Heritage and Stabilisation Fund (HSF) once again, seeking revenue sources amid lower than desirable tax incomes and a need to finance election spending and poor budgeting.
Since 2015, Finance Minister Colm Imbert has depleted the nation’s foreign reserves from US$10.5 billion to US$5.5 billion and has borrowed US$3.4 billion over the period.
The growing demand for foreign exchange, in addition to the PNM government’s demonstrated inability to create new foreign currency businesses, has plunged TT into a forex (foreign exchange) crisis that citizens are being made to suffer.
The forex cabal, which has been supported by the government, has exacerbated the severe shortage. The PNM’s refusal to dismantle this discriminatory allocation system has facilitated the development of an illegal black market for cash trading.
In addition, with failing government revenues, Imbert is now seeking to sponge up money by offering an amnesty to businesses that have been breaking the law by not paying their taxes on time. This effectively facilitates lawbreakers who have robbed citizens of billions in due taxes.
Ironically, while Imbert is happy to give these tax evaders “a bligh,” he is anxious to push property tax down the throats of citizens on the threat of taking away their properties should they default.
Any Form 4 economics student would know that economic development and growth require focus on creating new revenue streams, generating new industries to broaden revenue-raising measures, and developing an environment conducive to attracting foreign direct investment or even local investment.
But this has never been Imbert’s priority. Instead, his focus is on increasing taxation, extracting more money from an already overburdened population. This approach has reduced citizens’ purchasing power for necessary goods and services, resulting in greater hardships upon the population. All Imbert has done is tax, tax, tax. But he has also been repeatedly dipping into the HSF, the country’s savings.
In theory, Imbert’s focus should be on raising more money to repay debts. The government’s priority should be to find new ways of generating revenue, especially foreign revenue. It is a known cliché that a nation cannot be taxed into prosperity.
As the foreign exchange crisis worsens, it is expected that Imbert will again turn his eyes towards the HFS. Already, this PNM government has withdrawn US$2.9 billion from the fund – more than every single government in the nation’s history combined.
But having failed to generate more forex, and having shut down Petrotrin, a net forex earner, and having severely miscalculated the effect of Imbert's refund policy to the energy companies, the government has now put this country into an even worse forex crisis in which he continues to borrow to pay interest. This is not a sustainable practice.
What is required is a complete overhaul of the current zeitgeist – a new mindset – a reboot of the TT economy. This government has shown it
