VAT will go as part of April 1st tax reform
It was like taking one of those tests in which you answer your own questions and then give yourself a grade. Not surprisingly, at the first post election “People’s Assembly” last night the P.U.P. awarded itself an “A”. News Five’s Stewart Krohn was in the audience as the report cards were handed out.
The crowd in St. Mary’s Hall was standing room only and while all citizens were invited to attend, most of those who turned out were there to cheer and not criticize. And there was plenty to cheer about. In his report on the government’s first one hundred days in office Prime Minister Said Musa listed a litany of accomplishments including hundreds of millions of dollars in new foreign credits, changes in banking laws to promote expansion of credit, new outside investment and markets for Belizean products, infrastructural projects including schools, bridges and museums. The P.M. even announced a reduction in the waiting time for elective surgery at Belmopan Hospital. But the big news coming out of Wednesday night’s session can be summarized in three simple words: “No more VAT!”
Said Musa, Prime Minister
“We have done many other things to increase the money supply, reduce public debt and create greater opportunities, but if the people were to remain burdened with the killa VAT, they would still be unable to grow competitively. The Tax Reform Committee has completed a comprehensive review and we are grateful for the work they have done. Based on their recommendations, we are now moving to restructure the tax system in order to achieve a low tax, high growth economy.
Belizeans earning less than $20,000 annually will pay no income tax, and we will abolish property tax for low-cost dwelling houses. The Business Tax will be revised and streamlined within the framework of company income tax to eliminate anomalies which presently penalize the productive sector and discriminate against local and foreign investment.
Beginning in April, 1999 the only tax most Belizeans will pay will be a low-rate broad-based sales tax. And now that the work is completed I can finally announce that there will be no more VAT
starting next fiscal year.”
Lest anyone stop payment on their checks “next fiscal year” means April first, not January first, 1999. While details of the new sales tax expected to run between seven and ten percent, are not expected to be unveiled until late January, Budget Minister Ralph Fonseca told News Five this morning that the elimination of VAT is part of a complete revision of the tax system, and not just the exchange of one tax for another.
The overall reforms, according to Fonseca, include the elimination of what he calls “misconstrued and archaic” taxes like those on savings and certain excise taxes. Although the reading of the P.U.P. report card revealed a solid string of “A”s the Prime Minister did admit to one “incomplete” in that a promised contractor general had not yet been named, a situation which would be corrected in the new year. One other flaw in the otherwise pretty picture emerged in the question and answer session. It seems that a manifesto promise to appoint a regulatory commission to bring down utility rates was not receiving the prompt attention that consumers had hoped.
Said Musa
“Mr. Krohn, we are presently working in fact with the World Bank in the setting up of the mechanism for the establishment of this utilities commission. It’s a pledge that we are very serious about and certainly in the new year you will see the establishment of this utilities commission. Because this government is committed to bringing down the high cost of electricity, telephone and water.”
So with promises of lower taxes and cheaper utility bills out of the way all that remained was an assortment of questions ranging from the plight of pregnant teenagers to the long running battle for control of More Tomorrow Village.
But beyond the familiar rhetoric the fact is that the new government has hit the ground running… and with a legislative majority of twenty-six to three Prime Minister Musa has no excuses for anything but an all out effort. We asked him why he thought that he could succeed in a task in which others have fallen short.
Said Musa
“I think the key to this whole thing, in my humble view, is to be able to motivate people. Any government that feels that they can sit in Belmopan and bring about a healthy economy and stable democracy is fooling itself unless it involves the people. I think that is the key issue that Belizean people themselves, we have it within ourselves as a people to really create a beautiful country here in Belize. Our people must be inspired and they must be motivated. This is to me the key message that we are trying to achieve here, the key issue here to keep our people focussed to keep them motivated. Of course to be motivated, they need to have a stake in what is going on in this development. That is why it is so important that we must create the jobs that we’re committed to do, once people have jobs, once they are taking care of their families I believe the rest will take care of itself and the economy will grow. I have no doubt about it.”
Stewart Krohn for News Five.
Other announcements made at the assembly include the appointment of an interim board for the Karl Heusner Memorial Hospital, the identification of four potential sites for satellite residential communities on high land outside of Belize City, the projected reopening of the Libertad Sugar Factory by Taiwanese investors, the appointment of an ombudsman sometimes early in 1999 and the proposed settlement of a lawsuit brought by the Toledo Maya Cultural Council over land rights in Southern Belize. In a press release this evening the Opposition U.D.P. rejected virtually all of the government’s claims and said that the policies of Prime Minister Musa are destroying democracy, eroding confidence and exacerbating the existing economic tailspin.
