Pay Today…Poorer Tomorrow!

Since the global recession, governments big and small have been trying to find ways to plug budget holes. In some countries they are taxing things like cigarettes, alcohol, chocolates, perfume and other luxury commodities.  In one country they are even taxing horses that are used for pleasure rides. The new term being used to describe this form of taxation is “stealth taxes.”

All across the world, political leaders have stuck to one commitment, a commitment to no additional tax burden on the middle class. Many are also doing their best to increase revenue without drawing too much attention to the tightening fiscal noose.

Here in Belize, however, the Barrow administration is doing just the opposite; they are passing the financial burdens brought on by the recession as well as their obvious incompetence unto the Belizean people by increasing the gross receipt tax by 25 percent.   In addition they are putting more jobs at risk by introducing a new tax on EPZs, this coming after the Prime Minister reported in his budget speech that EPZ in areas like the shrimp farm, the citrus company and others had marginal or no growth in the past financial year.

In all the Prime Minister intends to collect an additional $109M in new taxes, none of which will come from “stealth taxes,” none from casino gambling, and a mere $1.8 million from Belize Natural Energy (BNE).

Given the public anger over the windfall that the owners of BNE collected and boasted about in an Irish newspaper last December, this meagre $1.8 in additional taxes on one of the richest and most profitable companies in the nation is not going over well. Belizeans from talk show hosts to the person on the street are asking how their government can ask them to make such huge sacrifices, and not ask the same of one of the country’s largest corporate entities.  Somehow it appears that BNE is in a privileged position.

This feeling that BNE is enjoying a certain level of entitlement started when the Prime Minister announced the introduction of his windfall tax on crude oil.  At an early stage in his administration, the Prime Minister threw out what his predecessor had done in relation to taxes on oil and introduced his own measures.  These measures saw the introduction of a windfall tax which would kick in once the price of oil hit US$90 per barrel.

From the day this announcement was made people were sceptical,  The Opposition leader and former petroleum minister told the Prime Minister that a $90 threshold was too high; he cautioned that $60 would be more realistic.

Since the $90 threshold was set, government has received no income from this initiative; however,  over that same period of time, the Belizean taxpayers have been burdened with over $50 million, with $30 million alone coming from additional taxes collected at the fuel pump.

This year, BNE will be asked to give up an additional $1.8 million in new taxes; this year the Belizean people will be asked to dish out an additional $109 million.

Instead of trying to come up with creative solutions to bridge its financial gap, the Prime Minister and his economic team will implement taxes that will not only destroy an already shrinking middle class, but will be bound to cause more suffering on the Belizean people, particularly the 43 percent of Belizeans who are poor. As if that were not enough, he will punish the productive sector with his burdensome new EPZ social tax, which could result in more job cuts and will squeeze 300 percent more from utility companies.

Last Monday when the Prime Minister lost his cool in the House of Representative and behaved in a most vulgar manner some thought he was simply buckling under the strain of the job, others argue that he was simply using this to divert attention away from the fact that he had just burdened Belizeans with an additional $110 million in new taxes.   Whatever the reason, on April Fool’s Day 2010, Belizeans will be given the biggest “whap” of all, only this time it will be no prank and there is no end in sight.

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