Budget presented to the House
Promising to take the brakes off the economic train and get it moving again in a direction that will benefit all segments of the economy, today the Prime Minister presented the new budget to the House of Representatives. The budget strives for a balance between necessary belt tightening measures and tax breaks and public spending designed to get money flowing again. According to the P.M., better revenue performance in the last two quarters and strict control of expenditure since September have set the stage for the 1999/2000 budget which will have recurrent revenue projected at three hundred and seventeen point seven million dollars for a conservative growth of four point two percent. Recurrent expenditure, with tight controls, is expected to reach three hundred and fourteen point five million. The Prime Minister says this provides a three point two million dollar surplus which, when added to capital receipts of fifty five point one million, will allow for domestic capital expenditure of forty six point five million. There will be an operational surplus of eleven point eight million dollars. The foreign capital component of eighty-three point three million is being funded by twenty point four million in approved grants and sixty two point nine million in concessionary loans. The overall deficit should then be sixty two point nine million less the operational surplus or fifty one point one million. The overall deficit is below four percent of the gross domestic product. But what most people, who listened to the budget today wanted to hear about was the repeal of the Value Added Tax and the new tax which — according to the P.M. — will bring in around seventy million dollars in revenue, but be less painful in the process. He also gave some welcome news about lower utility rates, in particular phone rates which he promises will be coming down, and coming down soon.
Said Musa, Prime Minister
“Today we introduce several pieces of legislation. The first bill abolishes VAT effective April first of this year. The Killa VAT is dead!
The second bill is designed to collect back taxes which have been on the books for years, while allowing those owing these taxes the opportunity to wipe the slate clean at a greatly reduced cost. This bill gives from 25 – 50 percent discounts on back taxes paid off by the end of June, 1999. We want Belizeans to commence a new era in taxation where evasion is unacceptable and unnecessary, because of a fair tax system of low taxes which are broad based and geared towards economical growth.
The third bill introduces a low 8 percent sales tax, with three exceptions which I will announce shortly, which is very simple to apply. The tax will be charged on importation and at the production point of goods and services in Belize. Registered local producers of goods will be allowed exemptions on their inputs to avoid inflation. For example, producers of local juices who are registered sales tax agents will not pay sales tax on their inputs. I should also point out that local producers and services providers whose gross income is less that fifty four thousand dollars per annum will be exempted from the sales tax.
Electricity and water will not be taxed and B.T.L. will be announcing rate reductions to accommodate this tax and still provide overall rate reductions.
In fact Madame Speaker I can now announce today that as part of its commitment to serve consumers better, B.T.L. has agreed with the government that telephone user rates in respect of both national and international long distance and cellular service will be reduced. It is expected that these new rates will come in effect by April first, 1999.”
