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Dec 6, 2011

IMF report solemn recommendations

The IMF country report was released late last week. It follows consultations conducted in August with Belizean officials on economic developments and policies. There are two issues that stand out in respect of social indicators. The report recognizes the high poverty rate of forty-one percent and says that despite a five point seven percent spending on GDP for social protection, it has not translated into results and that poor families remain vulnerable.  One recommendation from the IMF mission that may not sit well with most Belizeans is to increase the general sales tax from twelve point five to fifteen percent to avoid a predicted twenty-two million dollar decrease in GST revenues in the coming year. The alternative, says the IMF team, is to phase out tax concessions that were implemented in 2010. In recent developments, the report notes that the nationalizations of B.E.L. and B.T.L. have affected an already weak investment climate.

The IMF projects that the economy will expand modestly for 2011 since inflation is up due to increased fuel and food prices and that the external current account deficit will remain at around three percent of GDP. It notes, however, that the current fiscal strategy is “insufficient to place the public debt ratio firmly on a downward trajectory and to address the large financing needs that are projected to emerge over the medium term.” The findings reveal that contingent liabilities are estimated at seventeen percent of GDP, which is around a half-a-billion dollars, but only zero point seven percent of GDP is recorded in the official debt statistics. The four main sources that contribute to the contingencies include nationalized assets, pending court judgments mainly associated with foreign investors, cancelled contracts—including with foreign investors—and loan guarantees to the private sector. For an in depth look at the IMF report, you can view the complete findings at channel5belize.com.

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9 Responses for “IMF report solemn recommendations”

  1. Retired CEO says:

    IMF meanss it’s manuel’s fault. isn’t the special economic advisor to the PM.

  2. Lucas says:

    I do not agree with the IMF to increase any kind of taxes. Tax increase is not the solution. The more money the govt. has, the more they spend. The only way to stop govt. addiction to spending is to reduce their allowance and put the purse beyond their reach. However, I have some recommendations of my own: Implement a better system for collecting taxes. ( I have a property for which I had not paid taxes for five yrs. Every year I had been calling Belmopan to find out how much I owe and no body knew. Two months ago, I recieved a letter stating I have five yrs. in arrears plus penalties); Make sure every one pays their fair share. ( Their are a lot of people who are working but pay no taxes e.g. people with trades but have no licence e.g. electricians, carpenters, cement workers, gardeners etc. etc.); go aggressively after tax evaders, ( business people); ministers and friends of ministers should not be allowed tax breaks. Govt. should not use govt. assets for activities that are not the people’s business. ( using govt. vihicles for party politics; using govt. vihicles for family business or transporting their mamacitas etc. etc.) Return all assets taken by govt. and for which govt. can’t pay. ( the phone and electricity company). Govt. ministers and high govt. employees should take a voluntary pay decrease. Past and present govt. ministers and friends should all be tax audited. The church should return to Ceasar what belongs to Ceasar. Govt. should not write off loans owe to govt. ( Barrow should not tell much less allow any one who owe govt. loans for housing or business that they do not have to pay). I am sure their are more ways to skinned this cat.

  3. Iniate says:

    Increase GST??? STUPID!! It is already too high – people are corrupt right left and center with 12.5%. Go into many shops and they will ask you, want a GST receipt or no. Common practice, and increasing the tax will only make it more common!

  4. Bdf says:

    !@#$ the IMF and it’s idea of raising taxes on poor belizeans

  5. mylegacyb4mypeople says:

    I think if corruption within the government is addressed the problem will be solved especially the lost of revenue from the customs department that goes into the pockets of corrupted custom officials and also stifles competition on imported goods because it allows those that pays bribes to undersell those that do not.

  6. Ranto says:

    Let me give my recommendations……

    1. Cut Ministers’ salary by 50%. This will open there eyes and learn how to stretch their dollar like all Belizeans.
    2. Make each government offices independent. Hire a General Manager (through the normal hiring process and no political intervention) to run the affairs of each office and be HELD responsible to generate the expected revenues, manage expenditures, keep up with receivables, follow the law, policies and procedures as expected and provide good customer service to all Belizeans. Any General Manager that fails must be fired immediately. Fire ALL middle person between these offices and the Ministers since a General Manager would make better decisions for their offices.
    3. All Government vehicles should not be used during weekends.
    4. All Chinese Grocery Shop must have a Point of Sale system. I am surprised with the number of Chinese Grocery Shops in Belize and they don’t provide a receipt to their customers. It obvious that they understate their sales. Where is the power of the GST Dept.
    5. Government should develop a large planting field on each district that would grow the most basic vegetables and fruits. In addition, these planting field must be complimented with a cooperative and a market. All unemployed persons without a proper education must be given the opportunity to work these fields/market and earn something enough to survive. The unemployed persons with the relevant education can run the cooperative.
    6. All Belizeans must maintain their surroundings clean. They must chop infront of their lot and pick up the garbage. All villagers do this….only city people and town people don’t. They can see their lawn covering their front fence and don’t chop it. If this is done, we reduce the load on the city cleaners and they can concentrate on other areas and keep up with the cleaning demand.

    You know there is so many ways to generate revenues and cut costs. But how Minister Nemencio Acosta admitted to me…..”We are lazy to think” come on…do we really need ministers like this?

  7. *J-bird says:

    I am in agreement with Ranto’s & Lucas’ comments…..

  8. common_sense_now_rare says:

    The report fro the IMF is indeed unpopular, but there are valid reasons for the recommendations.

    Raise in taxes
    This will always be the unpopular decision but something we all need to come to terms with. The reason the IMF suggest raising taxes is so that the gov’t has more money to spend to improve the economy. By this i mean spending the money wisely, like building schools, roads, job training programs to help poor and unemployed workers to get jobs that pay a decent amount of money. they need to stimulate the economy. what has been happening is that the government has been spending the money on the wrong things that don’t particularly help the economy.

    Foreign investment
    Foreign investment is another means of stimulating the economy. When foreign investors invest in our economy the create more job opportunities without the government having to invest tax payers dollars. In reference to the nationalization of BEL and BTL, its not so much the fact that it is owned by the government but the message being sent to the international community about how we treat foreign investors.

    I can agree with Lucas and Ranto on the premise that we do need to be more organized and efficient especially in collecting taxes.

  9. landi says:

    How about the public taking initiatives to pay their taxes? And how about creating an enabling environment for small business development besides the agriculture cooperative? How about raising income margins? the populace that are paying taxes cannot pay more!!!

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