The Tobago House of Assembly’s limited power to make decisions for the island’s welfare is hurting Tobago’s development.
Secretary of Finance and Enterprise Development, Assemblyman Joel Jack, expressed this view earlier this week when he delivered the THA’s budget statement, requesting $5.8 billion for fiscal 2016.
Under the existing legislative arrangement, Tobago’s present and potential contributions to the national purse are not clearly defined, Jack said, and Tobago cannot pass laws, make certain financial transactions or source additional funds for the island’s development. He believes these realities significantly weaken the Assembly’s negotiating position when requesting funds from the Central Government.
The Assembly has estimated that it will raise $255 million in tax revenues in the next fiscal year, Jack stated, although he says the island has much greater revenue-generating potential. That sum, he pointed out, does not include taxes, fees, duties, levies and other imposts of firms such financial institutions operating in both Trinidad and Tobago.
“The revenues from many of these entities are still paid centrally by their head offices in Trinidad contrary to the tenets of Act 40 of 1996,” the Finance Secretary said. “Again, we expect the revenues generated by these entities to be quite substantial.
“Maybe the time has come for the enactment of more robust and effective legislation to compel companies operating in Tobago to pay their taxes in Tobago. Also, the revenues indicated fail to capture revenues generated from activities related to exploration and production of energy resources in the marine space around the island of Tobago, which from even cursory estimates are quite substantial.”
He added: “This is one of the critical issues that will be addressed in the ongoing discussions on self-governance for Tobago.”
Those talks between a Tobago team and a Central Government committee have stalled. The committee requested their third meeting be postponed, and has failed to negotiate a new date.
Jack said since the introduction of the Dispute Resolution Commission (DRC) rule, which states that Tobago must get between 4.03 per cent and eight per cent of the national budget, Central Government has provided the bare minimum allocation to avoid being legally challenged by the THA. It leaves the Assembly unable to fund its development initiatives.
“For fiscal 2015,” Jack explained, “while the Assembly was allocated 70 per cent of its request for recurrent spending, it was allocated only 15 per cent of its request for development spending, thereby leaving several critical development projects significantly underfunded,” Jack said.
The Secretary said he will not let Tobago’s fiscal constraints prevent the Assembly from developing the island.