PORT OF SPAIN — Trinidad and Tobago’s exit from the European Union’s blacklist of non-cooperative tax jurisdictions marks a significant achievement, according to former Minister of Planning and the Economy Bhoe Tewarie. The development, announced last week, clears a major hurdle for the Caribbean nation’s international financial standing.

Tewarie, who served in the ministry during the People’s Partnership government from 2010 to 2015, described the removal as a win that demands careful stewardship. ‘This is a milestone, yes. But it’s not one to celebrate with champagne,’ he told reporters during a virtual briefing on Thursday. Instead, he urged policymakers to treat it as a platform for strengthening the country’s economic strategy amid persistent fiscal pressures.

The European Union updated its tax blacklist in October, dropping Trinidad and Tobago after the nation addressed deficiencies in areas like tax transparency and harmful tax practices. Officials in Brussels confirmed the change, noting compliance with commitments made under the EU’s Code of Conduct Group. Trinidad and Tobago had been added to the list in 2020 alongside other jurisdictions flagged for inadequate information exchange on cross-border tax arrangements.

Tewarie pointed to groundwork laid by previous administrations as critical to this outcome. He credited the Kamla Persad-Bissessar-led coalition government with initiating reforms, including updates to double taxation agreements and enhancements to the automatic exchange of financial account information. ‘The heavy lifting started years ago,’ Tewarie said. Those efforts aligned with standards set by the OECD’s Global Forum on Transparency and Exchange of Information for Tax Purposes, where Trinidad and Tobago earned a ‘largely compliant’ rating in its 2022 peer review.

Current Finance Minister Colm Imbert’s team finalized the compliance push, submitting evidence of legislative changes in mid-2024. Among the steps, lawmakers passed amendments to the Tax Information Exchange Agreements Act and bolstered the Inland Revenue Division’s capacity for handling requests from foreign tax authorities. Imbert hailed the delisting during Tuesday’s Senate session, calling it a testament to the Rowley administration’s resolve.

Still, Tewarie cautioned against complacency. Trinidad and Tobago faces a ballooning public debt, now exceeding 60% of GDP, according to Central Bank figures from September. Energy sector volatility adds risks, with natural gas production declining and oil prices fluctuating. He advocated for diversification beyond hydrocarbons, pointing to unrealized potential in non-energy exports and digital services.

‘Prudent management means locking in these gains,’ Tewarie said. He called for a national economic council to oversee strategy, drawing on private sector expertise. Without such measures, he warned, the country risks slipping back onto watchlists maintained by the EU or FATF, the global money laundering watchdog.

The delisting carries immediate benefits. It eases access to European markets and development financing, where blacklisted status often triggered penalties or scrutiny. Local banks report smoother correspondent banking ties, vital for trade finance. Business groups like the American Chamber of Commerce echoed Tewarie’s measured optimism, pressing for sustained reforms.

As Trinidad and Tobago handles recovery from the COVID-19 downturn, Tewarie’s remarks underscore a bipartisan thread in the achievement. Persad-Bissessar, now opposition leader, congratulated the nation on social media but reminded supporters of her government’s foundational role. The episode highlights ongoing debates over credit in a polarized political landscape.

Looking ahead, fiscal 2025 budgeting will test the government’s approach. Imbert projects a primary surplus, banking on higher energy revenues. Tewarie advised pairing austerity with growth initiatives, including incentives for renewable energy and tech startups. His voice, seasoned by decades in public service, adds weight to calls for long-term vigilance.