It’s the Christmas season and the Government of Belize is giving away some big bucks. On December 21, 2006, GOB will give away up to $10,000 of taxpayers’ money in an innovative raffle, which the Tax Department argues, is aimed at improving compliance with the new General Sales Tax implemented this April.

There’s something queer about this offer, though. First of all, GOB claims that it is so cash-strapped it cannot afford to meet debt payments. And just last week, it was announced that we are adding $50 million to our debt burden. At the same time GOB can afford to gamble $10,000 of our money—and justify this by saying that its goal is to encourage compliance with the new tax – GST.

But it was Government that told us that the GST is a better tax, that it is self-policing, and that it is a consumer tax, that businesses won’t have to pay.

If the tax mechanism were self-policing, then why on earth would Government resort to a raffle to get businesses to comply? The claim of the tax department is that there are some businesses that are not issuing proper GST receipts. Raffle tickets are only given for “proper” GST receipts that clearly show the amount of GST charged to the customer. The argument is that since consumers want to compete for the big cash prize, they will, thus, pressure businesses to comply and issue proper GST receipts. Another argument given to the public is that insisting on proper receipts is to ensure that consumers don’t end up paying the bill.

We out here in the streets know that businesses never foot the bill! A business that wants “X” profits will make sure that regardless of the level of taxation, they will design their price formulas to get the profits they want. So the consumers always pay. But apart from that, it was GOB that sold the GST as a consumer tax. So how can they now tell us that this campaign would help to ensure that consumers don’t foot the bill?

What they should really say is that if a business does not report its GST collections, and does not pay GOB, then it is GOB—and hence the people—that gets robbed, twice over! Twice over because the consumer pays the tax that goes to private coffers, and taxpayers still have to meet whatever revenue shortfalls would result, either with more GOB borrowing or more taxation.

The GST Department has reported that the revenue collections are on target. If so, why do we need to give away money? By the way, haven’t we heard this line before? Remember that replayed phase: “the taxes are performing…the taxes are performing…” Lo and behold, Belizeans had to face subsequent tax hikes, which, despite strong union opposition, found their way into law.

At the time that the new GST law came into effect, we were told that the GST would not garner more revenues than the Sales Tax that it was replacing, but the tax department is reporting that revenues are performing slightly better than expected. The indications are, however, that GOB still wants to boost its collection efforts, to improve compliance from 80-odd percent to above 90 percent.

A $10,000 raffle is a band-aid approach, but what GOB needs is to formulate a long-term plan to ensure that GST works the way it was designed to. The raffle is a short-term, one-off deal. What will happen when it is over and the winner or winners pocket their cash, which may very well end up in the tills of downtown merchants during a Christmas spending spree? Come January 1, 2006, what will be GOB’s strategy to encourage compliance?

If the GST is really not self-policing, as has been claimed, then GOB needs to find long-term solutions to the problem, rather than quick fixes that squander precious taxpayer dollars.

In the meantime, however, we don’t think anyone would reject the $10,000 offer in these hard times. But don’t get too excited or feel too indebted, because it’s really your money! The public’s coffers will be $10,000 poorer, but will the non-compliant start doing the right thing? Likely not. Our projection is that even while GOB plays Santa with your money, they will continue laughing all the way to the bank—even as the tax burden causes a mammoth hump on the backs of consumers.