The time may have come for the government to consider a cap on its fuel tax take, the Business Senator advised in Wednesday’s Senate Meeting.
“Maybe the time has come for us to look at a set amount with respect to government revenues on the fuel, because Government is a beneficiary when the prices are high,” Business Senator Kevin Herrera said as he joined the debate on the General Revenue Supplementary Bill. “Perhaps if we look at a fixed amount, then we know what we’re up against at any given time.”
Herrera suggested the ceiling on fuel taxes, after highlighting that the government seems to be increasing spending on things that are not critical at the moment and that it seems there have been some increased cash inflows.
“So, if the government has gotten some influx of revenues, perhaps we should have been given a break in respect to the fuel and the other costs we face every day. It would have helped the economy,” Herrera said, as he lamented the fact that the price of premium, regular and diesel fuels have all increased due to international market conditions.
Herrera prefaced his suggestion by highlighting the fact that at the start of the current fiscal year (FY 2021/22), the Government had asked all stakeholders to share in the “sacrifice,” clearly referencing the ten-percent salary cut that the teachers and public officers had endured. At the time, Herrera had voted in favor of the FY2021/22 budget, inclusive of the salary cut for public officers and teachers. However, the senator seems to have hinted at questions as to whether or not the government is still committed to the shared sacrifice.
“And so when we were here doing this exercise in April of last year, there were tremendous sacrifices that we had committed to,” Herrera reminded. “We were very willing at that point—and still very committed—to make those sacrifices. But then when we come and see the third supplementary, and I hasten to add that I am sure that many of these expenses that are necessary. But, for the ones that are not urgent and critical, perhaps those could have waited.”
Like other senators who similarly spoke on the supplementary budget, Herrera also lamented the lack of transparency on the government’s part regarding both inflows and expenditure. “I don’t know what type of new inflows of revenues the government has run into. I understand that the economy has grown. But we haven’t seen those numbers.”
Excise on Fuel
Herrera’s reference to the tax take is on account of the fact that multiple imposts are levied on the commodity. One such charge is the excise tax, which was last amended five years ago.
In 2017, the government—among other revenue-enhancing measures tied to the then SuperBond renegotiation—had increased the excise tax charged on fuel. Under The Customs and Excise Duties (Amendment) Act 2017, Premium gasoline’s excise charge was increased to $4.35 from $4.04 per imperial gallon, and for regular to $3.95 from the previous $3.64 per imperial gallon.
Using data provided by the Statistical Institute of Belize (SIB), if just premium and regular are returned to their 2016 excise tax levels (a change of $0.31), it is estimated that the government revenues could decline close to $6.4 million.
Similarly, if a full dollar is removed (thereby, bringing the per-imperial-gallon figures for premium and regular to $3.35 and $2.95, respectively), the revenues to the government would decline by close to $21 million. Note this estimate does not include Diesel and Kerosene.