The Cost of Importing Buses into Belize and Tax Exemptions
On Thursday night, we reported that in late 2021 and early 2022, the Ministry of Finance approved a seventy-percent import duties and excise tax exemption for Floralia Limited to bring six 2022 Yutong buses in country. Since the news broke, Thomas Shaw, the President of the Belize Bus Association, has declared that the Government of Belize should offer the same form of relief to bus operators across the country, as it is rapidly moving forward with its plans to reform the public transportation industry. Marvin Vanzie, the Director of Floralia Limited, explained to News Five that the company paid more than four hundred and twenty thousand dollars to bring in the six buses. To better understand the rate of duties on imports in Belize, News Five’s Paul Lopez did some digging. Here is that report.
Paul Lopez, Reporting
All the vehicles in Belize had to be imported into the country at some point since we do not manufacture vehicles here. There is a cost attached to the importation of vehicles that must be paid at the point of entry. That fee is separate from the price of the vehicle, and it varies based on the specifications of the vehicle and its value.
Delroy Fairweather, Vice President, Customs Brokers Association of Belize
Delroy Fairweather
“Our tax based structure; it’s from import duty, environmental tax, and general sales tax. The general sales tax remains at a fixed twelve and a half percent, but that twelve and a half percent is calculated with the inclusion of the cost of the goods, percentage of import duty, environmental tax and then you factor in the twelve and a half percent. So, really something like that would only attract five percent import duty, by the time you finish with that calculation it is around twenty one percent overall duties and taxes.”
Delroy Fairweather is the Vice President of the Customs Brokers Association of Belize. He explained that the tax base is built upon four different fees, import duty, excise tax, environmental, and general sales taxes.
Delroy Fairweather
“In most cases I am thinking those vehicles for public transportation doesn’t ordinarily come on vessels and ships. Those would be driven in. And, even that again comes with its own cost. It may not be factored into the duties and customs cost because customs would normally use, they have a way they calculate what out what numbers they would use for vehicles coming over land. There is a set rate they will use, however that cost that you have to pay to drive in those vehicles, you still have to factor in the cost. So, behind the scenes it still comes as a cost to the importer.”
In the case of Floralia Limited, the Ministry of Finance approved a seventy-five percent exemption from Import Duty and Excise Tax. With the deduction, copies of official receipts from the transaction show that the company paid seven thousand dollars for import duty on each of the six buses. In addition, the company paid close to four thousand dollars for excise duty on each bus. If you do the math, that adds up to one hundred twenty-eight thousand dollars in savings on import duty and more than sixty-four thousand dollars saved on excise duty. Without the seventy-five percent exemption, the total duty on all six buses would balloon to more than half a million dollars. And that would be in addition to the over a quarter of a million dollar price tag on each bus. Replacing the buses widely used today in Belize with newer, more modern buses requires significant investment from bus operators. There have been talks about establishing a loan facility for bus operators at the National Bank of Belize.
[File: Sep 15, 2022] Ewart Metzgen, Secretary, Belize Bus Association
Ewart Metzgen
“The National Bank again, I will come back to them, they are willing to lend us up to a hundred and fifty thousand dollars to buy one bus. Now, we the tell unu that a brand new 2022 will run about half a million U.S. So, even within our system here, not even our local banks or the institutions willing to work with us will want to give us that kind of money. We need all duty exemptions so we could take that kind of money and get what we need fih get. We could get some nice bus for a hundred and fifty thousand dollars, providing we don’t have to pay duty and those things to bring them in.”
And the latest information is that bus operators have rejected the National Bank of Belize’s proposal because too much information about their operation is being asked of them. Notwithstanding their current position on the loan facility, according to Fairweather, anyone can write to the Ministry of Finance to request exemptions. Once approved, the only other challenge would be to source the necessary funds to purchase and transport a bus.
Delroy Fairweather
“I think anyone can write to the Ministry of Finance and request an exemption. Now, in this case I think the Fin. Sec. is the one who actually signs off. He would be the one to determine whether you will get that exemption of not. For example, it is a known fact that a public officer who has been working I am thinking, and again stand to be corrected, more than ten years, can write into the Ministry of finance and get an import duty exemption on a vehicle and the vehicle has to be within a certain year. The regular individual can write in. Not to say that it will be honored and granted. So, exemption is something that has been widely done right now.”
Reporting for News Five, I am Paul Lopez
It is unclear at this time whether this is an incentive being offered to all bus companies. Does the government encourage other operators to apply for duty exemptions? Furthermore, will they be awarded the same incentives as Floralia as part of the commitment to improving Belize’s public transportation system?
