Trinidad and Tobago’s new administration has tabled a national budget totaling US$8.81bn for fiscal 2025/26, underpinned by oil at US$73.25 a barrel and natural gas at US$4.35 per mmbtu.
Presenting his maiden package, Finance Minister Davendranath Tancoo told Parliament that the government expects to raise roughly US$8.24bn in revenue, US$8.81bn in spending and a deficit near US$575mn, about 2% of GDP.
Tancoo cast the plan as a people-first reset after the election. “Every dollar we spend, every measure we take, must be guided by a single principle: putting the people of Trinidad and Tobabo first,” he said to applause.
The spending side is dominated by social priorities. Education is allocated about US$1.30bn, Health US$1.22bn, National Security US$947mn and Public Utilities US$505mn, with Infrastructure (US$289mn), Transport (US$274mn), Rural Development and Local Government (US$269mn), Agriculture (US$168mn) and Housing (US$99mn) following.
Tobago’s total envelope, combining direct transfers and ministry projects, comes to roughly US$554mn, or 6.3% of expenditure.
The revenue plan mixes immediate excise and fee hikes with structural measures which take effect in 2026. For commercial and industrial users, an electricity surcharge of about US$0.0074 per kWh will begin next year (essential public services are exempt). A 0.25% asset levy on banks and insurers starts 1 January 2026, alongside a landlord business surcharge that requires registration and applies a small percentage to gross annual rent.
Excises on alcohol and tobacco take immediate effect, with rum and spirits doubling from the equivalent of about US$11.79 to US$23.59 per percent of alcohol, beer from ~US$0.77 to ~US$1.53 by gravity, and cigarettes from ~US$0.78 to ~US$1.57 per 20-pack.
A 5% import tax will apply to single-use plastics; the LPG subsidy on cylinders of 100 pounds and above is trimmed by US$0.074 per pound, while standard household cylinders are unchanged. National Insurance contributions rise by three percentage points in 2026 and again in 2027, with a gradual move of the full-pension age from 60 to 65 starting 2028.
Motorists who buy Super gasoline receive immediate relief: the pump price falls by the equivalent of US$0.15 per litre, cutting the typical 50-litre fill by about US$7.50 (from roughly US$1.15/L to US$1.00/L). VAT will be removed from a wide range of basic food items from 17 October 2025, and private pensions become tax-exempt from 1 January 2026.
Among the most far-reaching announcements was a 10% wage increase for public servants, which Tancoo said fulfills a key election promise. The increase will apply retroactively to two outstanding bargaining periods (2014–2016 and 2017–2019), bringing long-awaited back pay to thousands of state employees, including civil servants, statutory authority staff and Tobago House of Assembly workers.
Analysts estimate the measure will inject hundreds of millions of dollars into the economy, boosting disposable income and consumption, though it increases the wage bill and may also heighten inflationary pressures. Tancoo described the wage hike as both a moral and economic imperative, asserting that public servants “deserve to be treated with dignity after years of stagnation.”
To shift from short-term work schemes to permanent employment, the government will wind down the Community-Based Environmental Protection and Enhancement Programme (CEPEP) and the Unemployment Relief Programme (URP) and seed an Employment Fund worth about US$70.7mn, paired with roughly US$46.1mn from the Unemployment Fund for job creation. Tancoo also announced the Prime Minister will chair a new Financial Oversight & Appropriations Committee to police major outlays, while an Economic Resilience Council will steer investment and jobs.
The opposition People’s National Movement (PNM) derided the package as “fake and fraudulent,” focusing on the oil-price assumptions. Former Finance Minister Colm Imbert said the benchmark was “deliberately inflated.” “Having pegged the budget on a US$73 oil price when he knows that the price should really be US$53, what he is doing is overestimating revenue deliberately so that he can withdraw from the Heritage and Stabilisation Fund (HSF).”
Opposition Leader Pennelope Beckles called the design regressive for households, warning, that it gives with one hand and takes with the other. Former prime minister Stuart Young cautioned consumers, arguing that new business-side charges will feed through to prices and rents.
Business groups offered cautious support, welcoming customs modernisation, digital payments and governance reforms, but stressing execution risks. “Lasting impact will depend on consistent inter-agency coordination and predictable turnaround times,” said The American Chamber of Commerce of Trinidad and Tobago. Chambers in San Fernando and Tunapuna praised the fuel cut and the proposal to replace VAT with a simpler sales tax, provided long-delayed VAT refunds are cleared and foreign-exchange access improves.
Energy remains the macro swing factor. The government points to revived regional gas diplomacy and US backing for Venezuela-sourced supplies that could bolster output and foreign exchange. The 2025/26 budget marks a bold reset by the new administration, blending social relief with fiscal reform in an effort to revive growth and restore public confidence. Whether the ambitious mix of wage hikes, tax changes, and energy diplomacy succeeds will depend on disciplined execution, stable oil revenues, and the government’s ability to translate promises into tangible progress.
Source: Caribbean Insight