Trinidad & Tobago 2012/2013 Budget Highlights

Key Macroeconomic indicators Real GDP is expected to expand by 1.2% in 2012 Expenditure is based on an oil price of US$80 per barrel and a gas price of US$ 2.75 per MMBTU Total Revenue for the fiscal year 2013 is expected to be $50.7 billion. Expenditure for 2013 is expected to measure $58.4 billion, with the fiscal deficit projected to reach $7.7 billion or 4.6 percent of GDP (Table 1) Total public debt of 46.6% of GDP is expected for 2012 Selected Areas of interest Social Programmes: Rigorous review of social welfare programmes to ensure comprehensive and cost effective assistance to all those in need. National Insurance: i) All NIS benefits will be increased by 50% overall with the exception of the minimum retirement pension, which was already increased. Several grants including maternity and special maternity will be increased by 50%. Other benefits will be increased by 25% in 2013 and 20% in 2014. ii) Survivors benefits to be increased. iii) The contribution rate to increase from 11.4% to 11.7% in 2013 and to 12% in 2014. v) Maximum insurable earnings to increase from $8,300 in 2012 to $10,000 in 2013 and continuously to 2020. vi) All working and self-employed persons will be able to provide additional retirement income to supplement their NIS benefits. vii) Disability grants assistance grants to increase by $200. CLICO & Hindu Credit Union (HCU): i) A new insurance company to be incorporated and traditional policies and assets will be transferred from CLICO to this company. ii) The CLICO investment fund to be launched November 1st, 2012, with units from the fund to begin trading on the T&T Stock Exchange in January 2013. iii) Settlement arrangement for beneficiaries with balances over $75,000 at HCU will begin in November 2012 at a cost of $521.1 million. Financial Services: The International Financial Centre (IFC) will be launched by building a Financial Institution Support Services Industry (FISSI). Legislation and the associated tax incentives to support the FISSI will be introduced in 2013. Restructuring CEPEP & URP: A 150% allowance on salary payments will be provided to companies that employ CEPEP and URP workers. The National Productivity Council will manage the transition of these employees to the private sector. Environment & Water Resources: i) Waste management rules to be finalized. ii) 13,000 hectares of forests will be identified for protection under the National Reforestation and

Watershed Rehabilitation Programme. iii) $300 million allocated for drainage improvement. Sports: i) Build the National Aquatic Centre, the National Tennis Centre, the National Velodrome and three multi-purpose sport facilities. ii) Upgrade of recreation grounds, parks and indoor facilities. Customs: 30% import duty on used tyres Tobago: Allocation - $2.4 billion An additional $874.9 million to be spent under the various other Heads of Expenditure Establish 1,000 new hotel rooms through public-private partnerships Energy Harmonize the Supplemental Petroleum Tax (SPT) rates issued pre-1988 and post-1988 for marine areas A special 25% SPT is proposed for approved new field development at prices between US$50 & US$90 per barrel. An uplift of 40% of exploration cost for approved projects in deeper horizons for a period of 5 years. The price of premium gas increased to $5.75 per litre from $4.00 Education: Allocation - $9.1billion Measures to address wastage associated with the GATE facility includes the following: Refocusing the programme on priority study areas Graduate programmes will be funded at varying rates based on socioeconomic priority An integrated campus to house various public training institutions will be established in Tobago Health: Allocation - $5.1billion New hospitals in Point Fortin, Arima, Sangre Grande and Chaguanas Initiate work on the National Public Health Laboratory and the Caribbean Public Health Agency at Caura Upgrade the San Fernando General Hospital Housing: Allocation - $3.5billion Tax exemption for gains derived from the initial sale of newly constructed houses for registered developers. A similar exemption will also apply to the gains from the initial sale of land developed for housing. National Self Help Commission to assist vulnerable citizens in constructing their own homes. A target of up to 100 houses per year has been set over the next 3 years.

National Security: Allocation - $5.5 billion Special non-taxable allowance of $1000 per month to be extended to Special Reserve Police officers CCTV cameras to be exempted from custom duties and VAT. Agriculture: Allocation - $1.3billion NAMDEVCO to establish a Commodity Stabilization Fund to stabilize the price and supply of identified produce on the market. T&T and Guyana to establish food security facility to expand agricultural production through the establishment of several large agricultural estates in Guyana. Works & Infrastructure: Allocation - $2.4billion Government proposes to generate private sector involvement in several projects by means of the public-private partnership. These projects include: Extension of the Churchill Roosevelt Highway from Cumuto to Sangre Grande An Open-Ship Registry The La Brea Port Divestment Initial public offers (IPOs) to be brought to market for First Citizens Bank (FCB) and the Trinidad and Tobago Mortgage Bank (TTMB) Specific Fiscal Measures Government to conduct a comprehensive review of the current tax structure. Land and building tax waiver to continue until a new regime is developed. 150% tax deduction available to local production companies; also for corporate sponsorship to the local fashion industry as well as audio, visual or video production. The maximum allowable deduction for funding sporting activity to increase to $3 million. Gaming industry taxes to be increased Tax exemption for gains derived from sale or letting of newly constructed commercial buildings. Temporary removal of VAT on all food items