On Monday, March 15, the Prime Minister of Belize, Hon. Dean Barrow, presented his 2010/2011 Budget to the House of Representatives. The title of the speech is “Recovery Today, Prosperity Tomorrow”. A fitting title because the core objective of the Budget is to “nurture national recovery and return to secure and sustain growth”.

The Difficulties Faced  

The Prime Minister and his Cabinet are determined to make the decisions necessary to lead Belize towards a better future. The Government debt is

Making Tough Decisions 
 
The Prime Minister reemphasized his commitment to protect poor Belizeans in his Budget Speech. He said, “The dispossessed in this country must always know that the strong arm and watchful eye of the United Democratic Party will ever be the guardians of their welfare, promoters of their interests, and guarantors of their survival.” It was by this dedication to easing the burden on poor Belizeans that the Government made it possible for Belize to experience a deflation of 1.1% in a difficult 2009.
 
The Prime Minister went on to explain how he plans to guide the country through this difficult time. At that time, he announced the most difficult decision that he has made as Prime Minister. The new budget includes five new carefully calibrated tax measures that will help to secure a stable future for Belize. Of the five measures, four of them will only affect “those most able to afford them”. There will be an Increase in Business Tax for the supply of Electricity Services from 1.75% to 6.5%. This will yield $10 million. The Prime Minister said that this is based on their “profitability and perceived ability to pay”. An Excise Tax will be imposed on locally produced crude oil. This is projected to yield $1.8 million. This money will be used to increase road maintenance on the Western and Hummingbird Highways which are used for the transport of the product to the port at Big Creek. A social fee of 5% will be levied on the value of all goods and services imported into an Export Processing Zone. This measure is not expected to threaten their international competitiveness. The fourth measure is to recover $4.2 million in outstanding tax arrears owed to the government of Belize by the former owners of BTL and wealthy landowners. The fifth measure is the only one that will affect the Belizean masses. It is an increase in the General Sales Tax from 10 to 12.5%. The Prime Minister said, “We have had no choice in the matter… But even as we raise GST, we are mindful of our promise to protect the poor and lower income earners.”

Therefore, he also included measures in the Budget to make life easier for those individuals.

Tax Relief to Protect Poor and Low Income Belizeans
 
The Prime Minister reluctantly raised the General Sales Tax to 12.5%. Though it is considerably lower than the 15, 16 and even 17% GST in the other CARICOM states, he would not have done so if he did not put a safety net in place for low income Belizeans to cope. Therefore, he inserted several measures in the budget to make life easier. He withdrew GST and import duties from a host of items, in particular foodstuff. To be specific, these are the list of items that will receive duty exemption: Olive Oil, Ground Nut Oil, Palm Oil, Coconut Oil, Mustard Seed Oil, Rape Oil, Colza Oil, Linseed Oil, Corn Oil, Sesame Oil, Hot Dog Sausages, Luncheon Meat, Potted Meat, Macaroni and Cheese Dinner, Breakfast Cereals, Cornflakes, Hot Chocolate, Cocoa Drink Mix, Coffee in all forms, Coffee substitutes, Vitamins and Supplements, Inactive Yeast, Powdered Detergents, School bags, Refrigerators and Washing Machines. To assist farmers: Carton Boxes, Egg Boxes and Trays, Rice for sowing, Banana Plants, Banana Cable-ways, Irrigation Pipes or Plastics and Tractor Parts are also exempted from import duties. Dialysis fluids are exempted as part of the new program in the Ministry of Health. A similar list will be removed from the GST.

The most immediate tax relief will be seen through the extension of the Income Tax threshold from $19,600 to $24,000 per year. This means that any individual making less than $24,000 per year or $500 per week will not be asked to pay taxes. The Prime Minister will also remove GST from electricity consumption for customers using up to $200 of electricity per month. This is a $50 extension from the previous ceiling which was $150. There are many other measures in the budget directed at easing the burden on lower income Belizeans.
Why Raise Taxes Now? 

The thing that makes evolution more prevalent in the human species is our desire to make our environment a more favourable setting for our offspring to live in. One 19-year-old junior college student said it best. She said, “I don’t want my children to look me in the eyes 20 years from now and say, ‘Ma, tings realy haad.’ So it’s better that we deal with this now.” It is time to cut up that credit card with our children’s and grandchildren’s name and begin to pave the way for a future Belize that they will enjoy living in. It would be easy for Prime Minister Barrow to do the popular thing by increase spending and ignoring the budget. He could do that for many more years and win election after election. But what Belizeans must realize is that the same way Government’s money belongs to them, Government’s debt belongs to them as well. The question is not are we going to pay. It is when are we going to pay? Either we tighten up our belt now or mortgage our children’s future. In the future you may be able to say to your child, “Baby you received a quality education and have a nice job now because we made it possible.”