Tax regime needs revamping

Included in Belmopan’s adjustment programme are plans to review and revamp the tax system. And it seems that while the P.U.P. was eager to use the “Killa VAT” slogan during the 1998 elections campaign, twenty-twenty hindsight is now revealing that a return to that tax regime, though perhaps at a lesser percentage, might actually prove to be a saviour. The Musa administration today admitted that serious flaws within the current tax system can easily be remedied by a tax like VAT.

Jose Coye, Minister of Works/Minister of State, Finance
?We sense indeed that there is a tremendous amount of loopholes in the present tax codes, in terms of tax avoidance and tax evasion. And we believe indeed that if we can make changes in those areas where we can put in place systems that are self-regulating and you can follow audit trails, we think that will bring a substantial amount of revenue more.?

?The sales tax has not really been bringing in the kind of revenue that it should, especially at the beginning point. We have a combination in the sales tax itself, it?s not really a full sales tax in its true sense, it?s a combination, a hybrid of different taxes facing you.?

Jules Vasquez, News Director, Channel 7 News
?Unlike the VAT.?

Jose Coye
?Unlike the VAT mechanism, unlike the VAT mechanism indeed. The VAT mechanism is a better mechanism, there is no doubt.?

?Sales Tax and VAT are the same thing except that when we say of a sales tax, a retail sales tax is on the same base like the VAT mechanism is on, except that it does not collect the tax at each change. And what the VAT mechanism provides, why it is stronger than the retail sales tax is because it provides you with audit trails and provides you with self-regulation.?

In addition to changes in the tax system, Belmopan will also attempt to curb what the ministers referred to as generous fiscal incentives and will explore disparities within the business tax system to ensure equity.