Smuggling and e-commerce, subjects of tax conference

The largest association of tax administrators in the world is meeting in Belize this week. The delegates from Commonwealth countries throughout the world met at the Belize Biltmore Plaza this morning for opening ceremonies and a welcome from Minister of Economic Development Ralph Fonseca. The Executive Director of CATA says the meeting of managers and their technical staff will address some pressing international issues. As Minister Fonseca points out, for Belize, smuggling is a major concern.

Zahir Kaleem, Exec. Dir., CATA

“We rotate the subject for each technical conference and the main objective is to select topics, keeping in mind new developments taking place in the economic and fiscal scenario. For this particular conference we have selected two themes. One is the effect of the informal sector on the economy. The second is the effects of electronic commerce on economies in general. Not only in terms of the challenges it poses, also the opportunities that it offers for tax administrations.”

Ralph Fonseca, Minister of Economic Development

“The fact that the more you bring down your taxes and allow a free flow of goods over your borders, it is crucial that you have a feel for what is crossing over the borders or you loose your tax base completely as you bring down the tax base. Then you have to broaden your collection and strengthen your collection. And of course smuggling runs totally contrary to that.

In our case in Belize, I don’t have to tell you apart from the fact that almost every day people are intercepted unfortunately doing this. We also know from the market place that where there is very uneven pricing that this type of thing is affecting our economy.”

Fonseca says with such a high density of computers in the country, trade on the Internet, or electronic commerce is increasing. Since business can be transacted and profits made without goods ever coming to Belize it is difficult to monitor this sector of the economy or collect taxes. On the other hand, the Internet is also helping Belizeans to market their products and services abroad. The Commonwealth Association of Tax Administrators was created by the finance ministers of the Commonwealth in 1977. Currently 47 Commonwealth countries are members.