Government announces special economic zones across the country – Trinidad Tribune

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Minister of Trade and Industry Paula Gopee-Scoon delivers a speech during the Private Sector Opportunities in the Special Economic Zone Session and Panel Discussion at the TT Chamber Building, Westmoorings on September 19. – Photo by Gabriel Williams

Minister of TRADE and Industry Paula Gopee-Scoon has said that the Cabinet has designated several areas as Special Economic Zones (SEZ) under the Special Economic Zones Act.

She said these will be announced during the budget presentation on September 30.

Speaking at the TT Chamber of Commerce and Industry forum on private sector opportunities in the special economic zones, Gopee-Scoon said this is part of the government’s implementation of the law to ensure the programme kicks off quickly.

“These areas are being spread across TT to encourage new investment and create jobs that would otherwise not be available. The jobs created will not only exist within the zones but will also trickle down into local communities and help create new opportunities for small business owners and aspiring entrepreneurs.”

The minister said the law was fully promulgated on July 5, 2024, creating robust regulations, a new incentive framework and a fully operational SEZ authority.

“We intend that the incentive framework will be consistent with international best practices and enhance the attractiveness of TT’s business environment, while also protecting the domestic revenue base as much as possible.”

She called for collaboration between the private sector and government to make SEZs successful.

“Special Economic Zones are a popular policy tool for governments to boost industrialization and attract investment worldwide; however, their success and impact are not a given. For SEZs to succeed, it is crucial that the process is driven by constant collaboration between all stakeholders, just as we do today.”

Gopee-Scoon said the SEZ incentives will cover all three types of SEZ entities. These are SEZ operators, which act as landlords of special economic zones; SEZ enterprises, which do business in spaces managed by operators; and Single Zone enterprises, which are large, standalone operations.

The incentives include a 15 percent corporate income tax, a wide range of discounts and exemptions on import duties and sales tax, as well as other taxes such as property tax and stamp duty.

Gopee-Scoon stressed that not every company in TT is eligible to participate in the SEZ scheme as it is designed to stimulate new investment activities in the production of new goods and services, as opposed to the standard investments to upgrade factories and machinery of existing companies.

She said the ministry was well aware of the need to reduce bureaucracy associated with doing business. It was working with the Customs and Excise Division, the Inland Revenue Division, Town and Country Planning Division and the Environmental Management Authority, among others, to ensure that SEZs were models of efficiency and productivity that could be replicated across the TT economy.

The event was organised by the Chamber of Commerce in collaboration with Ernst & Young (EY).

EY Caribbean Executive Chairman Wade George speaks at the Private Sector Opportunities in the Special Economic Zone Session and Panel Discussion on September 19. – Photo by Gabriel Williams

Wade George, Chairman of EY Caribbean, said the law was the most comprehensive pro-private sector legislation he had ever seen in TT.

In a presentation, he said the creation of the SEZ was part of TT’s strategy to get off the European Union’s blacklist.

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According to him, the consequences of TT remaining on the blacklist would include: reputational damage, as TT would appear less legitimate and more susceptible to money laundering, tax evasion and other financial crimes; the termination of the tax agreement, which has already taken place, as Norway and Denmark terminated their tax agreement with TT; criminal tax consequences in the form of stricter controls, higher withholding taxes and non-deductibility of costs; loss of investment, as investors were deterred and foreign and direct investment declined; limited financing from across the EU; difficulties in financial transactions, as banks and financial institutions may be reluctant to process transactions involving blacklisted jurisdictions, potentially leading to delays and additional costs; and reduced economic growth, as countries appear less attractive for investment.

George said the short-term goal was to move to the grey list, where the country would be monitored but not restricted. He said the second round of Peer Review began on June 28, with a site visit planned for October.

George provided an overview of the SEZ incentives and the requirements to be met to qualify for the zones.

He said the SEZs were aimed at all levels of business. For micro-enterprises to qualify, they would need to have a minimum investment of US$10,000 (after January 31, 2022) with a turnover of less than US$250,000 and one to five employees. Small and medium enterprises would have US$50,000 in investment, with a turnover of more than US$250,000 up to US$10 million and employ six to 50 people. Large enterprises would have US$1 million with a turnover of US$10 million and employ more than 50 people.

According to George, applicants were required to have a completed Money Laundering/Terrorism Financing/Weapons of Mass Destruction Proliferation Risk Assessment (Know Your Customer) questionnaire. In addition, they were required to have evidence of sufficient financial resources to meet the eligibility criteria, a five-year operational plan, approval of inspectors for entry, compliance with relevant regulations and licensing, and an economic substance test from SEZA to ensure that all eligibility criteria are met in relation to the proposed revenue generating activities.

In addition, he said there would be ongoing reporting requirements including the filing required under TT laws such as income tax returns, VAT returns, annual corporate returns, Single Zone and SEZs would have to file half-yearly reports. He said all three entities would have to file annual operating plans, annual audited financial statements and data and information requested by the SEZA.

With reporting by Mya Quamie