The Rationale behind the Proposed Amendment to Income and Business Tax Rates

Christopher Coye

At Wednesday’s Senate meeting, Senator Coye went on to explain the rationale behind the proposed amendment to the rates on Income and Business Tax.

Senator Christopher Coye, Minister of State
“What we have noted is that in the banking system, in particular, we have excess liquidity in excess of seven hundred and seventy dollars which is undoubtedly an unprecedented level. We have loans in the banking system of about two point three billion dollars. So for us to have excess liquidity of almost eight hundred million dollars, that’s almost a third of additional loans that could be in the system
stimulating activity and generating foreign exchange. So it was felt that while we want to incentivize lending, in the discussions with the Central Bank, it was certainly a preference that we focus on target lending into foreign exchange earning sectors and those sectors include tourism, agriculture and B.P.O. sectors, which is an emerging foreign exchange earning sector for us.”

The government explained in a press release that Cabinet gave its approval for the unification of tax administration to be done in a phased approach. All major tax revenue entries will be administered and collected by one revenue department or authority. These tax revenue centers would include the Customs Department, the Ministry of Natural Resources, and the Belize Tax Services.