VZCZCXRO2675
RR RUEHGR
DE RUEHSP #0127/01 0721210
ZNR UUUUU ZZH
R 121210Z MAR 08
FM AMEMBASSY PORT OF SPAIN
TO RUEHC/SECSTATE WASHDC 9043
INFO RUEATRS/DEPT OF TREASURY WASHDC
RUCNCOM/EC CARICOM COLLECTIVE

UNCLAS SECTION 01 OF 02 PORT OF SPAIN 000127 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR EEB/IFD/OMA-SNOW AND FIGUEROA 
STATE FOR WHA/EPSC-MAIER AND WHA/CAR-JROSHOLT 
TREASURY FOR WESTERN HEMISPHERE - JEWELL, GRAY 
 
E.O. 12958: N/A 
TAGS: EAID EFIN ECON PREL TD
SUBJECT: FISCAL TRANSPARENCY IN TRINIDAD AND TOBAGO 
 
REF: State 16737 
 
¶1. Per reftel request, Post provides the following assessment of 
fiscal transparency in Trinidad and Tobago. 
 
¶2. The Government of Trinidad and Tobago (GOTT) publishes revenue 
and expenditure information each year in presenting its annual 
budget to Parliament.  Current projections as well as prior year 
outcomes are published by the Ministry of Finance and also posted at 
the Ministry's website, http://www.finance.gov.tt/, via the Budget 
Statement, the annual Review of the Economy report, and the Public 
Sector Investment Program. 
 
¶3. These documents provide reliable data for all general categories 
of revenue and expenditure, with explanations of any significant 
changes in specific line items from year to year.  For revenues, the 
Review of the Economy provides numbers broken out by the various tax 
and non-tax revenue sources and provides detail on energy sector and 
non-energy sector revenues in relevant categories.  However, the 
Government does not disclose payments by individual companies 
operating in the oil and gas sector.  Expenditures are reported in 
similar fashion, with project-related spending and foreign 
assistance detailed in the Public Sector Investment Program. 
 
¶4. Trinidad and Tobago passed legislation in March 2007 to convert 
the existing Interim Revenue Stabilization Fund into the Heritage 
and Stabilization Fund (HSF), modeled on best practices for 
sovereign wealth funds and drawing on advice from the World Bank. 
The legislation establishes clear rules for deposits and withdrawals 
when petroleum revenues exceed or fall short of GOTT projections by 
more than 10%, as well as a governance structure requiring quarterly 
and annual reports to the HSF's board by a professional asset 
manager.  The GOTT appointed the HSF board in 2007 and as of March 
2008 was in the process of recruiting a fund manager.  The HSF 
balance as of early 2008 was US$1.8 billion, equivalent to 11% of 
GDP. 
 
¶5. The most significant weaknesses in fiscal transparency in 
Trinidad and Tobago relate to public procurement.  Recent years have 
seen a proliferation of special-purpose public enterprises that are 
not required to work through the Central Tenders Board.  While 
budget allocations to these companies are known, questions have been 
raised about the integrity of contract tender and award procedures, 
particularly for infrastructure projects. 
 
¶6. The GOTT issued a white paper on public procurement reform in 
August 2005 but to date has not followed through on its stated 
intention to table new procurement legislation.  This delay reflects 
a GOTT decision to put higher priority on using energy sector 
revenues to fund rapid development. Asked about the status of 
procurement reform in August 2007 (concurrent with the 2008 budget 
presentation to Parliament), a Government minister reported that the 
first draft of new procurement legislation had been rejected because 
the proposed framework was cumbersome and would have slowed the pace 
of government funded projects. 
 
¶7. The U.S. Government has supported revenue transparency in 
Trinidad and Tobago by providing advisory teams in key areas to the 
GOTT on a contract basis and also through U.S. support for the 
Extractive Industries Transparency Initiative (EITI).  An advisory 
team from U.S. Customs and Border Protection (CBP) has provided 
advice on customs modernization and secure trade since 1994. 
Implementation of CBP advisory team recommendations has increased 
transparency, for example, by bringing customs, agriculture, and 
product safety inspectors together in a one-stop-shop examination 
station.  Another advisory team from the U.S. Internal Revenue 
Service (IRS) provided the GOTT with advice on automated tax return 
processing by Trinidad and Tobago's Board of Inland Revenue (BIR) 
and on the proposal to merge Customs and the BIR into a unified 
revenue authority.  By the time the IRS Advisory Team's contract 
concluded at the end of FY-2007, the BIR automation project was 
under way but not complete, while the GOTT timetable for 
establishing a revenue authority has slipped to the first quarter of 
¶2009. 
 
¶8. Trinidad and Tobago was among the first developing country to 
voice support for the EITI, but GOTT implementation has fallen 
behind other EITI candidates.  GOTT Cabinet ministers publicly 
stated their commitment to follow through with EITI in 
August/September 2007.  Since then, however, Trinidad and Tobago has 
not reported progress on candidacy criteria to the EITI Board. 
 
¶9. Aside from other countries that support EITI, Post is not aware 
of other donors or multilateral institutions providing assistance on 
fiscal transparency.  Trinidad and Tobago authorities cooperate with 
the International Monetary Fund (IMF) in conducting annual Article 
IV Consultations, but T&T has not volunteered for the IMF to report 
on its compliance with standards and codes covering fiscal 
 
PORT OF SP 00000127  002 OF 002 
 
 
transparency. 
 
AUSTIN