How Will G.O.B. Get Tax Monies for Budget?
Briceño was joined by attorney Christopher Coye to explain the implications for Belize’s economy. The Prime Minister insisted on Wednesday that Belize would never enter into any stand-by arrangement, much less a full program, with the International Monetary Fund while it is in charge. But it remains a possibility, especially with the looming spectre of the I.M.F. having to step in to offer “consultation” and “assistance” if Belize cannot get a two-percent fiscal surplus going in the next three financial years after 2017-2018. Coye says how the Government will come up with the seventy-million shortfall is not yet adding up.
Christopher Coye, Attorney/Adviser, P.U.P.
“Under revenue measures it talks about G.S.T., widening the base of G.S.T.; streamlining G.S.T. exemptions, that should raise thirty-three million dollars. Raising the G.S.T. general rate to fifteen percent, that should raise forty-one million dollars. Now I understand from media reports yesterday that the Prime Minister is looking to raise seventy million from revenues, revenue increases or upliftments and thirty million from expenditures. That’s basically seventy million right there. But at the same time, the indication from the FinSec is that you’re not going to touch G.S.T. much and maybe dabble in the exemptions a bit. So those are the numbers right there in terms of those two areas concerning G.S.T. The next one is revenue measures is increasing the excise taxes for wine, cigarettes, beer and rum. That should net six million; so if you don’t touch G.S.T., but you touch the sin tax and increase the sin taxes on these items, the projection is that you would raise six million dollars; so you still have sixty-four million dollars to pull together to get to seventy million in tax revenues – so where will that come from? Last year, a lot of the revenues came from fuel tax increases; the average jump from what was around thirty percent effective tax rate to almost fifty percent tax rate on fuel, garnered in or around a hundred million dollars in new tax revenues. The question is whether that will be further enhanced. But certainly, just addressing sin taxes alone, or increasing sin taxes alone as recommended, will not get you to seventy million.”
Briceño repeated his call for a trimming of the fat in the Public Service, particularly contract officers, and growing the productive sector as well as dealing proactively with other looming issues such as Petrocaribe.