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Tax Collection Increase, Public Servants and Teachers Hopeful

Updated: Jan 8, 2022

The most recent data provided by the Belize Tax Service Department which indicates that tax collections for three major tax categories are up by nearly 23% percent has public servants and teachers hopeful that they are closer to getting back their 10% salary cut that was instituted in June of this year.

President of the Public Service Union (PSU) Dean Flowers, upon hearing the latest figures, told the Reporter on Wednesday, “Any news that tax collections are up or increasing is encouraging and positive to the workers of this country who are ultimately responsible for the bulk of GOB revenues via taxes.”

President of the Belize National Teachers Union Elena Smith, also told the Reporter, “That would certainly be the hope since a ‘bad economy’ was the cause of us having to ‘sacrifice.’”

As we had reported last week, the combined collections for General Sales Tax (GST), PAYE, and Business Tax for the period April to July 2021 amount to approximately $138.4 million dollars. Of note is that this figure, which does not include several other fees and tax such as excise and import duties, surpass last year’s figures for the same time period by close to $26 million.

While that is certainly positive news for the Government, Flowers told the Reporter that what is missing is the numerous amount of business that allegedly continues to evade the payment of GST and other business tax. A figure which he says would be interesting to look at in terms of the dollar value and the amount that it translates into. Flowers also took aim at what he alleged is certain tax exemptions afforded by the Ministry of Finance to businesses for the same period as well as analysis on duties and taxes collected by the Customs and Excise Department. Figures which Flowers says he would also like for someone to look into to see whether the trend from that analysis is accurate.

“My humble opinion is whether the numbers look good or not, the current administration will make an effort to restore the 10% either before the village council elections or the municipal elections. That’s their script,” Flowers opined.

While the salary reductions will remain in effect until March 31st, 2024, the legislation makes provision for the cuts to be revisited and possibly reduced after yearly consultations with the social partners and unions.

On May 21st, 2021, when the motion was introduced in the House of Representatives, Prime Minister John Briceño at that time had indicated, “Today we are making the tough decision in cutting these salaries, but we believe in the next two or three years we will be on a path to sustainability.”

The tax increase, for the three major tax categories which represent about 60 % of the country’s total tax revenues is a positive trend for the country’s economic outlook and is in line with the reported rebound in economic activity for this year second quarter, which is between April to June.

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