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Belize Should Increase Consumption Taxes: IMF

by Ulrika Lomas, Tax-News.com, Brussels

19 June 2017


Belize should increase the General Sales Tax rate to cut its deficit, the International Monetary Fund has said.

The IMF said that the country should consider measures including broadening the base of the General Sales Tax (GST) and increasing its rate to the regional average of 15 percent, from 12.5 percent. It said that both steps could increase revenues by one percent of gross domestic product.

Electronic tax filing and payment systems could also be enhanced, especially for GST and income tax, where less than 10 percent of registered taxpayers file or pay their taxes electronically, the IMF said.

In his March budget speech, Dean Barrow, Belize's Prime Minister and Minister of Finance and Natural Resources, rejected the IMF's "publicly rehearsed" advice to raise general sales tax (GST), ditch zero-rated treatment for certain products, cancel exemptions, and increase personal and business income taxes as "regressive and punitive to both citizens and enterprise."

He instead announced a series of "pro-poor and pro-people" reforms, which he said would increase revenues by 2.2 percent of GDP. These include a 10 percent income tax on statutory boards of "quasi government entities;" increasing the excise levy on aerated water, beer and stout, cement, and fuel; increasing the environmental charge on imported goods by one percent; and raising stamp duty on foreign exchange permits by 0.5 percent.

TAGS: environment | Finance | tax | business | value added tax (VAT) | sales tax | budget | International Monetary Fund (IMF) | Belize | stamp duty | Tax

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