No Tax Changes in 2013-2014 Budget

The Government of Belize has made an announcement about be no new tax measures in its 2013-2014 Budget. Instead, the Government anticipates that improvements to tax administration will boost tax compliance rates.

The Government of Belize has newly implemented the ASYCUDA tax administration system. This is a computerized customs management system, developed by the UN Conference on Trade and Development (UNTCAD), which covers most foreign trade procedures. In particular, the system handles manifests and customs declarations, accounting procedures, transit and suspense procedures. The Government hopes that the system will boost customs duty collections as well as improve authorities’ ability to tackle non-compliance with respect to the nation’s General Sales Tax (GST) and Business and Income Tax regimes.

As part of a wider review of the tax regime – with technical support from the International Monetary Fund (IMF) – the Government of Belize is to consider bringing the hotel accommodation services sector fully under the General Sales Tax net while at the same time repealing the Hotel Accommodation Tax. Ways to allow GST credits for the hotel sector in cases where services are in fact business inputs, while mitigating the potential for tax avoidance are being evaluated.

It is also examined how to address the structural problems of, and improve the competitiveness in, the cruise service industry, through possible reductions in customs duties on inputs for such services and possible reform of the cascading business tax regime.

Comprehensive tax reform has been deferred until the Government receives feedback on the local tax regime from the IMF.

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