Monday, April 15, 2024

“Tax increase very likely”; social partners meet with Financial Secretary


The rumours that the Government of Belize (GOB) intends to raise taxes for the upcoming fiscal year were finally acknowledged by representatives of the Ministry of Finance. Early in February, consultations took place between the Government, trade unions and civil society on the General Revenue and Budget for this year. At the end of the consultations, GOB finally admitted the need to increase taxes.
The budget consultations were held at the Belize Biltmore Plaza Hotel, where Joseph Waight, Financial Secretary, spoke about the concerns being raised by social partners and the majority of Belizeans. During the meeting, it was suggested that the country’s current economic crisis can be attributed to the reckless spending by past administrations. “There is very likely to be a tax increase,” said Waight. “It is inevitable that there will be increases in some taxes and we are trying to see what items can least impact the economy, but at the same time, generate the resources needed.”
Waight explained that his government is looking at some aspects in the expenditure profile. “We are looking at what expenses we can compress. Wages, transfers, interest payments and pensions are very hard to compress,” said Waight. He mentioned that there is not much GOB could squeeze down on, because there is so much rigidity in the system. “What may be more compressible are goods and services,” he said. “This includes the usual things such as fuel usage, and more efficient procurement of goods for the Government.”
At the moment the Gross Domestic Product (GDP) is at 3.5% with the projection of a -0.6 in growth. According to Waight, given the current situation, they turned to their social partners for ideas and suggestions.
The business community stated that they were concerned about the measures the Government intends to execute. They hope that any decisions considered are equitable, easy to implement and would not halt growth in the country. Another suggestion was for Government to improve its administration and its efficiency first, before increasing taxes. Different unions also agree with the idea, and hope that the Government’s decision does little harm and more good to the national economy.
According to Eldred Neal, President of the Public Service Union, while they understand the inevitable increase in taxes, he calls for everyone to be more united than ever. At the same time he asked everyone to report any instances of Government and public sector waste, which would involve relatives of public officers. “If we become a bit more vigilant in the way we do our work, we will be able to ensure that there is no more lack in collecting where we can,” said Neal. “At the end of the day it comes down to public officers.” The unions expect that wisdom will prevail and that at the end of the day, GOB will focus on becoming more efficient. They expect the Government not only to collect taxes from where they are being leaked, but also focus in the way they are being spent.
At the end of the meeting, Waight indicated that the consultations are hopefully the start of an on-going process in engaging with the social partners. However, regarding a follow-up before the upcoming budget, he discarded the opportunity for another meeting. The Cabinet is reviewing the report on the consultations, which they will take into consideration in the shaping of the next budget, scheduled to read in mid-March.

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