ECA's Initial Reactions to 2026-27 National Budget Presentation

Following the Government’s second National Budget presentation, the Employers’ Consultative Association of Trinidad and Tobago (ECA) welcomes the emphasis on skills development and stronger connections between education and the world of work. This aligns with the ECA’s consistent advocacy in this area. The allocation towards the expansion of technical and vocational education in secondary schools and the READY internship programme, targeting approximately 1,300 students, are also encouraging. As these initiatives are established or deployed, employer participation in identifying relevant competencies and shaping workplace experience will be important, with success assessed through competencies acquired and subsequent progression into further training or employment.

The announced hotel developments and agricultural business formalisation programme also present encouraging opportunities. However, their wider value will also depend on the meaningful participation of local suppliers and the preparation of workers for the jobs they can generate. Connecting these initiatives with appropriate workforce development opportunities would help translate investment into more lasting benefits for communities.

At the same time, the ambition for substantial growth and job creation must be supported by conditions that allow businesses to invest, sustain operations and employ people with confidence. We recognise the Government’s need to secure revenue to meet substantial financial obligations. Nevertheless, the extension of the 75% limit on the utilisation of carried-forward losses to general trade and business raises concerns about cash flow since businesses returning to profitability may still be rebuilding reserves after earlier losses and restricting the relief available in a particular year could constrain funds for reinvestment and employment. These implications are also relevant in the context of outstanding VAT refunds, compliance requirements, and the proposed VAT on digital and remote services supplied by non-resident providers. In this regard, the ECA further emphasises the need for clear implementation guidance and monitoring of the impact of these measures, particularly on micro, small and medium enterprises.

The Government’s decision to reform and modernise the existing VAT system provides a useful basis for further engagement. Last year’s Budget also included a commitment to clear outstanding VAT refunds, and the ECA would welcome transparent reporting on progress made, together with more predictable arrangements for future refunds. The planned tax-system upgrade is encouraging and should deliver practical improvements, including more timely processing and fewer administrative burdens, with support during the transition. The proposed conversion of selected goods from zero-rated to VAT-exempt status also warrants clarification, particularly regarding the affected goods and the treatment of input tax. While no VAT would be charged at the point of sale, the treatment of input VAT could affect business costs and prices.

Regarding the NIS, the proposed strengthening of penalties for unpaid National Insurance contributions reinforces the responsibility of employers to remit contributions legally due. Enforcement should be consistent and supported by accurate records and accessible arrangements for resolving discrepancies. The proposed review of the claims and appeals system is also a useful step towards more timely access to benefits.

The ECA also supports addressing genuine gaps in workers’ benefit eligibility arising from COVID-19 restrictions. The proposed remedy should clearly establish eligibility and funding, distinguish these gaps from unpaid contributions legally due, and avoid creating retrospective liabilities for employers who complied with their obligations.

With projected expenditure of $63.368 billion and a deficit of $3.639 billion, disciplined implementation remains essential, together with clear contingency plans and sustainable financing of public commitments, including negotiated wage obligations.

The ECA will continue to examine specific allocations and implementation arrangements as the budget debate progresses and further supporting documents become available.