Sunday, 22 May 2016

International Monetary Fund Annual Article IV Mission to Trinidad and Tobago - Mar 2016

Over the years, hearing the phrase International Monetary Fund (IMF) has called to mind:
  • Conversations on hardships, such as the 1980's in Trinidad when public servants lost their Cost of Living Allowance (COLA), 
  • Personal suspicion as to interactions with their persons,
  • Immediate changes in one's behavior such as, in Suriname in January  2011, when there was a  small devaluation  of the Surinamese dollar (SRD) against the US dollar and taxi fares within Paramaribo moved from Surinamese dollar  seven (SRD7) to SRD 14 and SRD 21 within one week. Hearing about how difficult it was for a person who was living on an income denominated in SRD and the impact on their ability to feed their children was heart wrenching.
To my surprise, quite recently, I realized that  there is a positive side to the IMF, in that aside from all of the harrowing results of their work, they provide assistance via consultants and  perform annual visits to countries.
More importantly, the reports on their annual visits are made available to the public via governmental websites  and it happens in a short time after the visit.  Sometimes the period in which they visit the country may be auspicious in that:
  • The work of the IMF re their "Annual Visit" was performed in March 2016 in Trinidad and Tobago when the country was heading to an end of the month which signaled that  half of the financial year had passed. At that time also  report  on the first six months in the financial year of the country from a new government was due to the public, the House of Representatives and the Senate in a short time after the end of the first quarter in the calendar year  of 2016. While this may not have been significant to many outside of Trinidad and Tobago and  what was known to the Trinidad public was that this was a newly elected government and  that in addition to the public, they were reporting to the party which was previously in power. Hence the anticipation which was building within the country.  
  • The country was also heading to an end of month (March 2016) where there were several public holidays, in that there was the  Easter long weekend which consisted of a Friday to Monday break, followed by a middle of the week public holiday in the next week of the month, which was on March 30, 2016. This mini holiday period was occurring in the first quarter of the  calendar year 2016  for persons and businesses who were operating in the country.  Also there are several types of taxes due for businesses, some of which are based on current sales and revenue such as Green Fund Levy and Business Levy. Business Levy which is paid on current figures, can be  offset against Corporation Tax for companies which are paying taxes in that quarter, hence there are additional calculations which are due at this time. With these taxes, there is the expectation of accuracy to ninety percent (90%) as it is expected that persons would keep track of their income and receipts  in a timely manner and avoid penalties and interest which arise from late payment of same. The conflicts between the desire to enjoy the public holidays and the need to be accurate in their financial reporting and part with hard earned cash may have contributed to an agonizing time for many an income earner and business man. See the  following link to the Tax Dates of 2016 for Trinidad and Tobago.
  • In addition to the above, there were taxes on the prior year's earnings  which were due in the next month which was April 2016. There were some persons who elected to pay eighty percent of their income taxes in December of the preceding year and now had to pay the remaining twenty percent of same, almost a month later.  Thus  for these persons, they may not have known whether to grow their business or just stay afloat for that period.
Back to the IMF: In light of all of the above, the information which is provided by the IMF consultants attempts to be balanced in that they make a lot of effort to understand the workings of the country and overall the level of professional care which is displayed in the information which is provided is quite high.

While the phrasing  in the extract below may be based on the style and content that  those who perform audits of financial statements of multinational companies are accustomed to, when documenting responses to various types of risk, for some persons in light of our tendency to speak not favourably of the different parties and persons who reside in the political arena, either due to our habits or experiences, the information may be taken as a call to work on our welcoming attitude and responses so as to develop good tourism etiquette.
"The IMF has concluded that despite the great challenges posed by the need to adjust to low  prices, Trinidad and Tobago still has enormous strengths, including a well-educated work force and a stable political system."
Here are is another extract which may be food for thought in our way forward and may challenge us to support our country in one way or the other:
"The IMF noted that since assuming office six months ago, the new Government has already taken some difficult but necessary steps in the face of sharply lower energy revenues, such as widening the VAT base, reducing fuel subsidies, reducing the number of Ministries with a view to streamlining the civil service, as well as instituting spending cuts."
Here is the link to the media release which was made in March 2016.

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