Trinidad’s FY2027 Budget: Ambitious Plan or Overpromise? | Dr Marlene Attzs

This is CBR Briefing.

For decades, Caribbean governments have competed for foreign investment through tax holidays, duty exemptions, and other fiscal concessions.

The bargain is familiar.

Surrender revenue today for investment, jobs, and growth tomorrow.

But a critical question remains insufficiently answered.

Do these concessions change investment decisions or merely subsidize activity that would have happened anyway? The exposure is large.

IMF estimates put revenue foregone through corporate income tax and import-related incentives across 15 Caribbean economies at an average of 10.8% of GDP during 1995 to 2004.

More recent figures show Jamaica's tax expenditures are revenue foregone through concessions and exemptions at 2.47% of GDP in 2022, and the Dominican Republic's at roughly 4.6% in 2023.

The measures differ in coverage and method, but the message is consistent.

Preferential taxation is a major feature of regional fiscal policy.

Yet, comprehensive tax expenditure reporting remains uneven, so the region cannot say what its aggregate exposure is today, let alone what it buys.

The more consequential question is whether governments are competing on the right terms.

Research published in September 2026 by CPP Investments drawing on 65 senior institutional investors in 20 countries managing about $47 trillion is instructive.

Respondents cited market opportunity, 80%, regulatory efficiency and predictability, 72%, policy stability, 69%, and openness to global capital, 66%, as the main attractors.

The deterrents measured these.

Unattractive risk-adjusted returns, 58%, political risk and policy reversal, 54%, Regulatory uncertainty or fragmentation, 49%.

And insufficient scale or liquidity, 46%.

Tax treatment did not feature among the leading factors.

This does not prove, however, that taxation is irrelevant.

The survey examines institutional capital allocation across largely advanced economies.

North Caribbean greenfield investment and incentives were not separately reported.

But it echoes a body of multilateral research suggesting that stability, infrastructure, and institutional quality matter more to investors than tax relief.

Capital needs viable opportunities, credible institutions, predictable rules, and returns commensurate with risk.

Concessions may improve project economics at the margin.

They cannot compensate for costly or unreliable energy, weak infrastructure, skills gaps, fragmented regulation, or poor project execution.