Caribbean & Central America - November 2025

Trinidad & Tobago’s finance minister, Davendranath Tancoo, part of the new United National Congress (UNC) government that took office in May, unveiled the fiscal 2026 budget in October, amid some criticism that revenue targets are over-optimistic.

Total government spending in 2026 is set to be TT$59.23bn (US$8.74bn). With revenues projected at TT$55.37bn, there will be a deficit of TT$3.86bn, equivalent to around 2% of GDP, within what Tancoo described as “the international benchmark of three percent”.

An initial criticism from opposition and independent economists is that the new budget has been built on the optimistic assumption that international oil and gas prices will average US$73.25 per barrel and US$4.35 per million British thermal units (mmBTU) during 2026. Since both are currently priced respectively at US$63.50 and US$3.09, the suggestion is that the new government may experience a revenue squeeze.

The administration has highlighted various budget measures intended to strengthen household incomes. There has been an immediate TT$1 per litre reduction in the price of super gasoline, along with the removal of VAT on various basic food items. From January private pensions will be tax-exempt. Import restrictions on used cars and vans are being eased.

The previous Peoples’ National Movement (PNM) administration (2015-2025) had offered public sector workers a 4% wage improvement. The new UNC administration of Kamla Persad-Bissessar has gone one step further, announcing a 10% increase, including back pay. Tancoo echoed the party’s electoral rhetoric saying, “Promise made, promise kept because when UNC wins, public servants win.” There is also help for farmers with VAT removed on agricultural machinery and other items. A further feature of the 2026 budget is that the smaller island of Tobago will benefit from a larger-than usual share of national spending.

Tancoo announced several tax increases to part-fund his government’s largesse. Employers’ National Insurance System (NIS) contributions will rise 3% in January, with a further 3% due in January 2027. A landlord business surcharge of 2.5%-3.5% of rental income will come into force in January. There will also be an electricity surcharge on commercial and industrial customers, an asset levy on commercial banks and insurance companies, and higher duties on alcohol and cigarettes. Among other measures the government is also introducing a 5% import duty on single use plastics, and a TT$5m Women’s Health Fund to address period poverty and offer free menstrual kits in schools.

True to Trinidad and Tobago’s tradition of adversarial politics, the PNM was cited by daily newspaper Trinidad and Tobago Newsday as describing the government’s budget as “fake and fraudulent”.

The same report, published on 14 October, cites former finance minister Colm Imbert (2015-2025) as saying that the government was aiming to use a loophole to access money from the Heritage and Stabilisation Fund (SSF). He noted that if actual international oil and gas prices fall below budgeted levels, governments can withdraw 60% of the difference from the HSF. Prime Minister Persad-Bissessar denied trying to exploit the loophole, saying her government will not use the “PNM tricks” of the past.

Jobs

A potentially far-reaching change announced by Tancoo is the elimination of the Cepep-URP job programmes, which are to be replaced with “full time better jobs” through a TT$475m employment fund. Cepep (community based environmental protection and enhancement programme) and URP (unemployment relief programme) have been in existence for decades and are widely seen as low productivity “make work” programmes subject to political manipulation and featherbedding. The government will likely be scrutinised on its ability to use the new funding to create more sustainable and productive employment.