Belize Budget to indirect Taxes to Boost Revenues

March 21st, 2017

Belize has rejected International Monetary Fund (IMF) recommendations to raise taxes across the board in favor of more selective reforms that are proposed as less punitive to the jurisdiction’s businesses and poorest citizens.

In his budget speech the Prime Minister and Minister of Finance and Natural Resources, Dean Barrow, rejected the IMF’s “publicly rehearsed” advice to raise general sales tax (GST), ditch zero-rated treatment for certain products, cancel exemptions, and increase personal and business income taxes as these measures are “regressive and punitive to both citizens and enterprise.”

Instead of the above-mentioned, he announced a series of “pro-poor and pro-people” reforms, which he expected to increase revenues by 2.2% of GDP. These include a 10% income tax on statutory boards of “quasi government entities;” increasing the excise levy on aerated water, beer and stout, cement, and fuel; increasing the environmental charge on imported goods by 1%t; and raising stamp duty on foreign exchange permits by 0.5%.

Belize to hike Taxes in Upcoming Budget

March 10th, 2017

According to Belizean officials, the jurisdiction is to announce wide-ranging tax hikes in its upcoming Budget in order to solve its fiscal woes.

In a recent interview, Belize’s Financial Secretary Joseph Waight said that the Government of Belize cannot rule out tax increases. In February, the Government said it was considering potential options for hikes. “We don’t know just yet, that’s still in the process we are going through but I think that at this point in time it is inevitable that there will be an increase in some taxes,” Waight said.

Waight also said that business leaders and unions have told the Government of Belize that it should first of all improve the efficiency of the tax administration and only after that look at tax hike options.

Belize signs UN Convention against Corruption

December 9th, 2016

As the world observed International Anti-Corruption Day, the Government of Belize signed the United Nation’s Convention Against Corruption (UNCAC).

Deputy Prime Minister Patrick Faber officially signed the UNCAC treaty on December 9, 2016, so Belize became the 184th country to sign this convention.

After discovering an array of scandals within the Government, the Belize National Teachers Union (BNTU), along with citizens of this country and other organizations demanded action from the government. Officials from the Government of Belize and members of the Belize Chamber of Commerce and Industry, signed the treaty making the jurisdiction a signatory of the UNCAC.

At the signing ceremony, Faber said expressed his pleasure to make Belize a signatory of the Convention that this will aid in championing the issues of corruption in Belize. He added that it is only one step forward in the development of Belize and that the government is glad to be a part of a global effort in fighting against corruption and fostering the development of countries and their people. The signing reveals the start of the development of the framework for the upcoming work plan of the Government under the Convention.

In his address, Volkmann said, “I can assure you and the people of Belize that the UN, particularly UNODC and UNDP, we are ready to help Belize on its way to bring in the experience from other countries, to bring in the technical expertise this is needed to move forward on a way that in fact is a task of the Belizean government, the Belizean society, to find the right ways to end corruption and be more transparent.”

Prime Minister Barrow signed an Instrument of Accession submitted to the UN Secretary General after the Senate ratified the notion on November 30, 2016.

The UN Convention focuses on 5 main aspects:

– Preventive Measures;
– Criminalization and Law Enforcement;
– International Cooperation;
– Asset Recovery;
– Technical Assistance and Information Exchange.

It also consists of 71 Articles, divided into 8 Chapters. The Convention details anti-corruption measures that signatories are required to implement within their laws and institutions. These measures aim at preventing corruption, including domestic and foreign bribery, embezzlement, trading in influence and money laundering.

Belizean Government to restructure Superbond to avoid Economic default

November 21st, 2016

In order to avoid a chaotic default early in 2017, the Government of Belize is urgently trying to restructure its billion-dollar debt arrangement, a Superbond that expires on 2038.

A team consisting of Prime Minister and Minister of Finance Right Honorable Dean Barrow, Financial Secretary Joseph Waight, and Economic Ambassador Mark Espat travelled to New York City, USA, to meet with the Government’s legal and financial advisors. From November 7 to November 12t, the group met with key personnel from Citigroup Global Markets Inc., Cleary Gottlieb Steen and Hamilton LLP, to work on a new round of negotiations to ease payments on the debt.

The Belizean Government urged bondholders to form a creditor committee before the end of November so as to agree to a restructuring of the debt. This amendment on the Bond, sought the reduction of Belize’s public debt expense through lower interest rates. Another suggestion tabled to the advisors was the possibility of extending the life of the Superbond beyond the expiration date of 2038.

Despite the fact that the jurisdiction is experiencing serious financial difficulties, it must meet external debt payments. The next payment to the Superbond is due on February 2017, so it is hoped that a restructuring happens as soon as possible in order to secure this guarantee.

According to Prime Minister Barrow, the meetings in the USA were preparatory before notifying bondholders and the public what it is expected of the restructuring.

Another cause for concern is Belize’s 2:1 exchange rate peg with the US dollar being affected. The Central Bank of Belize announced a couple weeks ago that the country’s foreign reserves were currently around USD 315 million. The international benchmark for exchange rate sustainability requires Belize to keep its foreign reserves at USD 300 million and above. Falling below this benchmark will result in the Belize dollar being devaluated.