Higher taxes – that’s what Prime Minister Dean Barrow proposed this morning in his presentation of the 2017/2018 Budget of $1.18 billion at the sitting of the House of Representatives.
The Prime Minister wants to raise over $80 million dollars in revenue from increased taxes to plug the budget’s widening deficit. According to the Prime Minister, while economic experts proposed heavier austerity measures, the tax increases sought by his Government in the next fiscal year are the least painful to Belizeans.
Rt. Honourable Dean Barrow - Prime Minister of Belize
“The IMF recipe has been publicly rehearsed and is well known by all, their formula is raise the GST, eliminate those items mostly basis food and medical supplies that are zero rated, cancel the exemptions for the productive sector and raise the tax stake from personal and business income but we are Pro Poor and Pro people and so we reject those options as regressive and punitive to both citizens and enterprise instead we have come up with our own recipe. That the very first revenue measure to be adopted in the new financial year will be this; all statutory boards are hereafter required to contribute 10% of their 2017/2018 income to the consolidated fund if the expenses of these queasy government entities cannot be a vigorously policed as ministries and departments will be then the next best alternative is to reduce their income flows. (1) We are going to adjust the Excise levy on aerated water, beer and stout, cement and fuel to generate 0.77% of GDP. (2) We will amend the departure fee for non-Belizeans travelling by air to $40.00 to yield 0.30% of GDP. (3) We will bump the environmental charge on imported goods by 1% producing 0.41% of GDP. Nest, we will shift the social fee on Free Zone cigarettes, only in the Free Zone, to 20% generating 0.29% of GDP. We will lower the tax threshold for electricity consumption from $200.00 to $1100.00 yielding 0.19% of GDP as it is now to help poor people you pay now GST if your bill is under $200.00, we have checked and poor people’s bill don’t’ go above $100.00 so we are lowing it so that poor people still protected and once you pay $100.00 and or less as your electricity bill there will be no GST charging. Finally, Madam Speaker, we will amend by fifty bases points the stamp duty on foreign exchange permits to yield 0.22% of GDP taking together supplementary revenues will increase by 2.2 % of GDP which when combined with our cost containment efforts will produce an overall adjustment of over 3% of GDP for fiscal year 2017/2018.”
The 2017/2018 budget follows weak economic performance. In fact, last year while the primary surplus was projected at -1.68%, there was contraction and the primary surplus was actually -7.59%. With all of this, the Government is forecasting a primary surplus of 3% this coming fiscal year, but this is merely out of necessity since bondholders have tied positive economic performance as a condition to the re-negotiated Superbond payment terms. This is why Leader of the Opposition Hon. John Briceno slammed the PM’s budget in media interviews just minutes after it was presented in the House.
Honourable John Briceno - Leader of the Opposition People’s United Party
“Like how somebody rightly describes this Budget, the Barrow's Bogus Budget, because if you just were to take a second and think about it, he is now talking that he is now going to have a primary surplus of 115 million dollars, that’s a turnaround from this year of 211.5 million dollars so now he has never had a primary surplus for the past five years or certainly never had more than 2% now in an economy that is contracting he is now going to have a primary surplus of 3.1% the same thing goes to his overall deficits that now all of sudden he is going to have no more deficits in his overall he is going to have a surplus of 6.6 million again that is a turnaround of over a 167 million dollars, he is talking about what planet who is living I think we need to find out what planet the Prime Minister is living in but probably from all accounts he does not care because when they have to come back with supplementary budgets later on during the course of the financial year he is not going to be around that is going to be somebody else’s problem, so we’re not surprised, there’s nothing new in the budget, there’s no innovation the same empty Barrow promises, capital expenditure which is really the investment in a country has been cut dramatically so whilst I wish we could see something better I am not at all surprised by the Prime Minister’s Bogus Budget. Remember last year he was talking about stability in a time of change and now he is talking about bouncing back, a bold Belizean recovery but obviously there is no bouncing back in this budget but just more pain on the Belizean people, if we were to take a quick look at some of the numbers I mean, this government claims that, they like to boast that they are a Pro Poor Government and I think that I and to agree with him that they are a Pro Poor Government because they are keeping people poor you know, every year they spend more than a billion dollars in their budget yet the numbers of poverty continues to go up and there is nothing in this budget; no specific projects that can show you how they are going to reduce poverty in this country. Secondly they are talking about the taxes that is about 80 million dollars more that they are going to collect or its actually 88.1 million dollars more in taxes that they are going to be squeezing out from the Belizean people just last year in fuel alone they added another hundred million so this is another 88.1 million dollars that the middle sector, middle class will have to pay.”