Economist Dr Vaalmikki Arjoon has outlined the potential benefits to Trinidad and Tobago arising from a new taxation measure introduced in the Finance Bill 2026, which was passed in the Lower House on Wednesday.
Speaking on the Trinidad and Tobago Today morning show, he explained that the new taxation measure, which targets energy companies, will broaden government revenue earning within the energy sector by improving tax collection and broadening the tax base.
“With the new fiscal terms being offered, this 8% royalty and the 130% of qualifying expenditure to be deducted over five years, that could very well help to reverse the underinvestment in these marginal fields and improve the economics of developing these smaller marginal fields.”
Dr Arjoon noted that the current 12.5% royalty is charged on production rather than profits, ensuring that the Government earns revenue from resource extraction regardless of whether companies make a profit.
The Economist noted that the terms of the legislation will provide an incentive for energy companies to develop these marginal fields.
“Marginal gas fields are a very important supply intervention for T&T’s energy sector. What you find is these energy majors, they operate on large acreages, but within these large acreages have small or marginal fields, offshore fields that remain stranded undeveloped, even though they contain gas that can help to boost the national supply of gas and that could help to boost our LNG.”
Dr Arjoon highlighted that several opportunities could emerge from the non-energy sector.
“One could be, for example, food processing, agro processing could play a bigger role. We have the new agro-processing facility, we have Brechin Castle that could help farmers move beyond simply producing more crops into transitioning to higher-value products.”
He added that the measures can encourage compliance and improve transparency within the tax system, contributing to more sustainable national development.