Businessmen balk at new taxes, time for reform
A no vote in parliament, says Usher, raises repercussions beyond the U.H.S. debt. A default would trigger a ‘risk premium’ on the international financing market for borrowing by both Government and private sector. But closer to home, Usher said an unequivocal no to any threat to raise taxes to cover the debt, as the Prime Minister appears to threaten. While the Chamber does not ultimately have any say on the matter, Usher warned that such a move would scare away business. He instead proposes that Government implement serious reform that would close loopholes, improve management and increase revenue, and stop ignoring the suggestions of the social partners.
On the Phone: Nikita Usher, President, Belize Chamber of Commerce and Industry
On the Phone: Nikita Usher
“A no vote by parliament that Belize is now default in paying, because the ruling of the court has been that you have now been entitled to pay it. It then means that you then start to question investment climate; you start to question risk premiums. What is risk premium and who deals with risk premiums? Should you go on the international financial market to borrow money, there’s a risk premium involved; your interest is interest plus risk premium. When you have a government or a country that has not paid its debt the risk premium tends to be a little higher and so the borrowing rate becomes a higher rate. So again the business community will pay that price. If we want to talk nationalistic, then I think we should be looking at reforms. From the Chamber’s point of view, what is most important for us right now, is how do we fix our Constitution, our laws, to not have such a situation re-occur. Let’s come to the table and discuss fixing the loopholes that exist in the current Constitution and laws. The Chamber doesn’t have any say over whether taxes are raised; that’s the Government’s prerogative. What we are saying to you, let us come to the table and discuss how do we close the loopholes and that will give you the tax revenues to settle most of the debts you want to look at as opposed to increasing taxes. Increasing taxes does not always give you more revenue; instead people find ways to try and evade.”
