Govt scraps tax on pensions

Pensioners in Trinidad and Tobago are set to receive a significant financial reprieve as the government announced the scrapping of income taxes on pension payments. Prime Minister Kamla Persad-Bissessar confirmed in Parliament that this measure, initially signaled in the national budget, will be formalized in the upcoming Finance Bill and applied retroactively from January 1, 2026.

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I am authorised by Cabinet to make the following statement in relation to the status of the measure stated in the 2026 Budget Statement by the Hon Minister of Finance relating to the exemption from Income Tax on pension payments received from approved pension fund plans and approved deferred annuity plans within the meaning of the Income Tax Act Chapter 75:01.

This decision is a direct response to concerns about the tax burden on retirees, who have contributed to pension plans throughout their working lives. The Prime Minister emphasized that a pension represents "years, sometimes decades, of sacrifice, discipline and commitment" and should be rewarded, not penalized. By exempting income from approved pension fund plans and deferred annuity plans accessed at retirement or maturity, the government aims to ensure that citizens can retire with "dignity and peace of mind."

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This Government remains firmly committed to improving the lives of the people of Trinidad and Tobago and ensuring that the promises we make are promises we keep.

The Trinidad Express reports on this development, noting that while the move is welcomed by pensioners, questions remain about the potential revenue loss to the state. The government has implemented a safeguard, ensuring that early withdrawals will remain taxable to prevent system abuse. This policy shift aligns with the government's stated vision of "putting people first" and acknowledging the contributions of its citizens. The move is framed as a matter of "fairness" and "responsibility," aiming to ease the financial strain on working families and reward long-term financial planning.

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This is a significant and meaningful step forward. It is about fairness. It is about responsibility and above all, it is about people.