Caption: Minister of Finance and Minister in the Ministry of Planning, Economic Affairs and Development Davendranath Tancoo
By Alicia Chamely
SUPPLEMENTATIONS made to the 2025 fiscal package have increased the overall budget deficit from $5.5 billion to $9.67 billion.
The need for the $3.14 budget supplementation was due to the underbudgeting of the previous People’s National Movement (PNM) government and the responsibility of the new United National Congress (UNC) government to fulfil the country’s economic obligations.
This was explained by Finance Minister Davendranath Tancoo during his presentation of the Finance (Supplementary Appropriation) Bill 2025 and Mid-Year Review 2025 on Wednesday at the first session of the 13th Parliament held at the Red House, Port of Spain.
At Monday’s meeting of the Finance Standing Committee, Tancoo sought the approval of $3,143,983,761to supplement the 2024/2025 National Budget.
Tancoo, who described the mid-year package as the “Clean Up Bill.” He said, “These funds are necessary in large part to meet the multiple instances of deliberated under budgeting or to meet obligations promised in the budget speech of the Minister of Finance then, but for which no provision was actually made or for new initiatives determined by the then People’s National Movement (PNM) government.”
Breaking down the $3.14 billion supplementation, Tancoo said, $2,865,046,761 would be used for recurrent expenditure and $278,937,000 for the National Development Programme.
He said of the $278,937,000 supplementation for the National Development Programme, $159 million was for the Ministry of Education to acquire laptops for students and to carry out school repairs during the July/August holidays.
Tancoo said the majority of the recurrent expenses being faced by the new government dealt with the payment of salary arrears, loan payments, contract payments and payments for goods and services.
Discussing revenues for the first half of the 2025 fiscal package Tancoo said, “Revenue projections for the period October 2024 to March 2025 the revenue collections was projected at $24.58 billion, instead $24.09 billion was collected, a shortfall of $485.5 or almost half of a billion”
Tancoo blamed this shortfall on the former governments under resourcing of the Board of Inland Revenue, which hindered their ability to collect tax.
He said, “The 2025 budget was predicated on an average oil price of $77.80 US per barrel and natural gas price of US $3.59 MMBtu. Our estimation for oil and gas prices to the end of fiscal year 2025 is US $66 per barrel and US $5 per MMBtu.”
Tancoo said, “With this and other adjustments we anticipate a decrease of total revenue of $556.7 billion with an overall resultant fiscal deficit for 2025 of$ 9.67 billion. That is the PNM legacy. They need to own it.”
Addressing how the $3.14 billion needed to supplement the budget would be financed, he said, “Given the state of the economy at present we are forced to fund this increased deficit principally by borrowings on the local capital market as well as by drawing down on existing multilateral facilities.”
Tancoo said, “Let be clear, Mr Speaker, that this plan is an interim strategy aimed at restoring financial stability. It will be followed by a more comprehensive and impactful reform in the 2025/2026 National Budget.”
