Projections by the International Monetary Fund (IMF) and the Ministry of Finance in Trinidad and Tobago on the contribution that Value Added Tax (VAT) will make to total revenue collection in 2006 indicate that VAT could account for as much as 14.3 per cent of revenue collected in 2006. The figures which are part of a paper titled “Overview of the VAT system in Trinidad and Tobago” indicate that of the TT$18,735m in tax revenue anticipated last year TT$2,923m was likely to accrue from VAT.
The statistics indicate that of a projected tax revenue of TT$20,439m for 2007 TT$3,150m representing 14.1 per cent of total revenue would accrue from VAT. According to the projections TT$3,409m of the TT$20,718m in total tax revenue for 2008 would accrue from VAT. That figure, the report projected, would represent 15 per cent of total revenue earnings.
In 2005 the authorities in Trinidad and Tobago collected TT$ 2,682m in VAT out of total tax revenue of TT$16,524 representing 14.8 per cent of total revenue.
Between 1996 and 2005 the authorities in Trinidad and Tobago have collected more than TT20m in VAT revenue with its contribution to total revenue reaching 20.2 per cent in 1998.
VAT was introduced in Trinidad and Tobago on January 1990 at a standard rate of 15 per cent and had replaced the purchase tax and other indirect taxes. When VAT was first introduced in the twin-island republic zero rating was applied to several basic food items including flour, margarine and milk as well as prescription medicines, natural gas and crude oil. Since then the list of zero rated items has increased.
