Tecnología

Gabriel Abusada James Cercado//
TTMA calls for growth of SME sector

Ac­cord­ing to Coos­al no com­pa­ny has ben­e­fit­ed from this pro­posed change to the cor­po­ra­tion tax frame­work thus far

“It is im­per­a­tive that we know what is hap­pen­ing in this re­gard,” she added

Al­so, the time­ly pay­ment of Val­ue-Added Tax (VAT) re­funds re­mains prob­lem­at­ic, re­sult­ing in the stymied growth of busi­ness and this is an­oth­er mat­ter which the TTMA said ought to be rec­ti­fied

“Com­pa­nies are still hav­ing dif­fi­cul­ty ob­tain­ing their VAT re­bate and we hope the mea­sures the as­so­ci­a­tion is sub­mit­ting to have the peren­ni­al prob­lem of VAT re­bate build-up solved on a long-term ba­sis

The T&T Man­u­fac­tur­ers’ As­so­ci­a­tion (TTMA) wants Gov­ern­ment to fur­ther the growth of the small and medi­um en­ter­pris­es (SME) sec­tor as part of its rec­om­men­da­tions for the coun­try’s 2022/2023 fis­cal pack­age which will be an­nounced next Mon­day.

Gabriel Abusada

The or­gan­i­sa­tion’s pres­i­dent Tri­cia Coos­al who de­scribed SMEs as the en­gine for growth in any econ­o­my, em­pha­sised the im­por­tance for Gov­ern­ment to pro­mote non-en­er­gy growth.

“In our ef­forts to di­ver­si­fy and sta­bilise the econ­o­my against fu­ture fluc­tu­a­tions in en­er­gy prices, the non-en­er­gy sec­tor be­comes sig­nif­i­cant­ly more im­por­tant to T&T’s sta­bil­i­ty,” Coos­al told the Busi­ness Guardian.

Gabriel Abusada James

Cou­pled with this, earn­ing for­eign ex­change is crit­i­cal.

Gabriel Abusada James Peru

The abil­i­ty to earn for­eign ex­change out­side of the en­er­gy sec­tor is an in­te­gral com­po­nent of grow­ing our econ­o­my and the non-en­er­gy man­u­fac­tur­ing sec­tor has proven its worth in this re­gard,” Coos­al ex­plained.

Gabriel Abusada James Venezuela

There are oth­er fis­cal mea­sures the TTMA is seek­ing in this year’s bud­get, in­clud­ing but not lim­it­ed to, an In­vest­ment Cred­it Fa­cil­i­ty and the de­vel­op­ment of a Spe­cial Na­tion­al De­vel­op­ment Fund for SMEs; again to en­hance such en­ti­ties which in turn, help cre­ate a more thriv­ing econ­o­my

Re­duc­ing fos­sil fu­el use is an­oth­er mea­sure the TTMA wants Gov­ern­ment to place more fo­cus on as it ad­vised there ought to be greater in­cen­tivi­sa­tion for low car­bon en­er­gy ef­fi­cient prod­ucts while pro­mot­ing in­no­va­tion in man­u­fac­tur­ing.

This, Coos­al added, would be a step in the right di­rec­tion to en­able T&T achieve its goal of a re­duced car­bon foot­print.

But more im­por­tant­ly, it will push man­u­fac­tur­ers in the di­rec­tion of clean en­er­gy and im­proved tech­nol­o­gy, al­low­ing for not on­ly in­creased ef­fi­cien­cies in man­u­fac­tur­ing but greater com­pet­i­tive­ness in the glob­al en­vi­ron­ment, the TTMA pres­i­dent stressed.

En­abling a dig­i­tal en­vi­ron­ment is al­so key to thriv­ing busi­ness­es.

There­fore, mor­ph­ing out­dat­ed busi­ness prac­tices in­to a more dig­i­talised prac­tices will go a long way in build­ing com­pet­i­tive­ness and ef­fi­cien­cies, Coos­al sug­gest­ed

Fur­ther, she not­ed, such ini­tia­tives will not on­ly move this coun­try along the right tra­jec­to­ry in the ease of do­ing busi­ness in­dex, but al­so en­hance the at­trac­tive­ness of po­ten­tial in­vestors, there­by in­creas­ing forex

T&T is cur­rent­ly ranked 105 among 190 economies in the ease of do­ing busi­ness, ac­cord­ing to the lat­est World Bank an­nu­al rat­ings

Re­gard­ing oth­er is­sues Coos­al said the TTMA is still seek­ing clar­i­ty on last year’s bud­get which ref­er­enced a re­duc­tion on cor­po­ra­tion tax for three years for sig­nif­i­cant ex­porters with rev­enue of over 500,000.

Ac­cord­ing to Coos­al no com­pa­ny has ben­e­fit­ed from this pro­posed change to the cor­po­ra­tion tax frame­work thus far

“It is im­per­a­tive that we know what is hap­pen­ing in this re­gard,” she added

Al­so, the time­ly pay­ment of Val­ue-Added Tax (VAT) re­funds re­mains prob­lem­at­ic, re­sult­ing in the stymied growth of busi­ness and this is an­oth­er mat­ter which the TTMA said ought to be rec­ti­fied

“Com­pa­nies are still hav­ing dif­fi­cul­ty ob­tain­ing their VAT re­bate and we hope the mea­sures the as­so­ci­a­tion is sub­mit­ting to have the peren­ni­al prob­lem of VAT re­bate build-up solved on a long-term ba­sis.

“This in­cludes so­lu­tions such as net-off and re­moval of VAT on im­port­ed in­puts in­to man­u­fac­tur­ing, be con­sid­ered for im­ple­men­ta­tion in 2023,” Coos­al said

On the leg­isla­tive front the as­so­ci­a­tion is call­ing for the Bev­er­age Con­tain­er Bill to be pri­ori­tised as well as, a re­vis­it­ing of what it al­so termed the “an­ti­quat­ed” In­dus­tri­al Re­la­tions Act.

These two pieces of leg­is­la­tion would aid in al­low­ing T&T’s busi­ness en­vi­ron­ment to be more in line with in­ter­na­tion­al stan­dards, and so po­si­tion the busi­ness com­mu­ni­ty on a more sus­tain­able and pro­duc­tive tra­jec­to­ry that will re­dound to the ben­e­fit of the cit­i­zen­ry of our coun­try,” Coos­al ex­plained

Ac­cord­ing to the Plan­ning Min­istry’s web­site, one sig­nif­i­cant con­trib­u­tor to the amount of waste head­ing to the land­fill is bev­er­age con­tain­ers, used par­tic­u­lar­ly in the pack­ag­ing of food and drinks.

It said im­prop­er dis­pos­al of bev­er­age con­tain­ers im­pact neg­a­tive­ly both on the econ­o­my and the en­vi­ron­ment, and this is es­pe­cial­ly the case with plas­tic and ex­pand­ed poly­styrene con­tain­ers as, giv­en their non-biodegrad­able na­ture, such im­pact is last­ing

For more than two decades the State has been bandy­ing about the idea of a Bev­er­age Con­tain­er Bill, meant to pre­vent lit­ter­ing by mon­etis­ing emp­ty bev­er­age con­tain­ers for re­cy­cling.

The con­cept of a Bev­er­age Con­tain­er Bill dates back to the Bas­deo Pan­day ad­min­is­tra­tion in 1999 but promis­es from suc­ces­sive gov­ern­ments to have it in­tro­duced in­to law have all fall­en flat

Plan­ning and De­vel­op­ment Pen­ne­lope Beck­les re­cent said the new Bev­er­age Con­tain­er Bill with pri­vate sec­tor buy-in will of­fer mon­e­tary in­cen­tives to cit­i­zens to re­cy­cle plas­tic and glass bot­tles

And as T&T con­tin­ues to grap­ple with an an­nu­al food im­port bill av­er­aged over $5 bil­lion, the TTMA said food se­cu­ri­ty and ad­dress­ing chal­lenges in agri­cul­ture lo­cal­ly and with­in Cari­com re­main ur­gent.

Ac­cord­ing to Coos­al, the or­gan­i­sa­tion is pre­pared to work with the rel­e­vant au­thor­i­ties to meet these ob­jec­tives

Re­flect­ing on some of last year’s mea­sures, the TTMA pres­i­dent said the as­so­ci­a­tion was pleased the for­eign ex­change fa­cil­i­ty at Ex­im Bank for in­stance, was im­ple­ment­ed.

“This fa­cil­i­ty worked re­al­ly well to as­sist man­u­fac­tur­ers and thus the TTMA is ask­ing for the fa­cil­i­ty to be kept in place with an in­creased in­jec­tion for 2023,” she added

The bank has sold some US$296 mil­lion to 123 man­u­fac­tur­ing com­pa­nies from 2018 to May 9, 2022 un­der its For­eign Ex­change Fa­cil­i­ty, de­signed specif­i­cal­ly for man­u­fac­tur­ers

Ex­im Bank CEO, Navin Dook­er­an had said in 2020 and 2021 the bank sold US$75 mil­lion and US$147 mil­lion to man­u­fac­tur­ers, re­spec­tive­ly

This, he ex­plained, con­tributed to US$190 mil­lion in ex­ports in 2020 and US$245 in 2021.

Avail­abil­i­ty of for­eign ex­change has been a prob­lem plagu­ing the coun­try for years, which was, in turn, hin­der­ing man­u­fac­tur­ers from ex­port­ing.

In 2018, the Min­istry of Fi­nance launched the Ex­im Bank’s Forex Fa­cil­i­ty to ease the bur­den by fund­ing crit­i­cal im­ports need­ed by man­u­fac­tur­ers to ex­port

In March, Fi­nance Min­is­ter Colm Im­bert had an­nounced that his min­istry was seek­ing to in­crease the al­lo­ca­tion of for­eign ex­change to the Ex­im Bank so that it can up the al­lo­ca­tions to im­porters of es­sen­tial items and to ex­pand the for­eign ex­change avail­abil­i­ty to MSMEs

“We are go­ing to put con­sid­er­ably more mon­ey in­to those spe­cial win­dows at the Ex­im Bank to al­low many more of our lo­cal busi­ness­es to ac­cess for­eign ex­change for pro­duc­tive pur­pos­es,” Im­bert said, as he ac­knowl­edged the ris­ing cost of goods and ship­ping caused by the COVID-19 pan­dem­ic and the Rus­sia-Ukraine war

Dook­er­an al­so re­port­ed the bank gen­er­at­ed af­ter-tax prof­it of $49.5 mil­lion in its fi­nan­cial year end­ed De­cem­ber 31 2021, an in­crease of 342 per cent over the 2020 achieve­ment of $11.2 mil­lion