Executive Chairman of EY Trinidad and Tobago, Wade George, has expressed strong support for the Government’s decision to increase NIB contribution rates and gradually raise the retirement age.
During his budget presentation on Monday, Finance Minister Davendranath Tancoo revealed that the Government intends to increase the NIB contribution rates to save the institution from bankruptcy and preserve the benefits for future generations. He also announced a ‘gradual adjustment’ to the retirement age for a full NIS pension.
Speaking at a post-budget discussion on Tuesday, Mr. George welcomed the Government’s announcement of reforms to the National Insurance System (NIS), saying the move was required.
“The Government’s decision to increase contribution rates and gradually raise the retirement age is not just a necessity, it’s courageous. Certain leeways should be looked at in terms of parameters for investments so that the investment returns could yield a better result. But otherwise, this was absolutely mandatory.”
Mr. George also voiced his full support of the replacement of CEPEP and URP.
“These programmes, once well-intentioned, have long been criticised for inefficiency and misuse. Replacing them with funding mechanisms for sustainable, productive employment is a step forward.”
One of the most discussed measures is the new Landlord Business Surcharge, which the EY Executive Chairman described as a pragmatic alternative to the abandoned Property Tax regime.
“This newly introduced income tax surcharge on commercial and residential rental income represents a pragmatic approach to property yield taxation. Unlike the abandoned Property Tax regime, which relied on contentious and often imprecise measures of annual rental value, this surcharge is levied on actual income earned. In doing so, it aligns taxation with economic reality.”
Addressing concerns from the business community, Mr. George defended the surcharge on industrial and commercial electricity consumption.
“The introduction of a $0.05 per kilowatt-hour surcharge on industrial and commercial electricity consumption may understandably raise concerns from you about increased operating costs. However, this measure must be viewed in context. T&T continues to enjoy some of the lowest electrical rates globally.”
The EY Chairman urged stakeholders to embrace the tough decisions as necessary steps forward.