The new tax is hailed as a more broad-based tax, meaning that it will apply to more goods and services than the existing tax. GOB claims that it will make the tax system more equitable by spreading out the tax to include services that do not currently fall under the sales tax umbrella.

At press time, the Government of Belize had not issued an update on this week?s Cabinet meeting, at which the GST was discussed. However, Amandala has been able to ascertain from credible sources that while the Government?s technical finance staff were crunching the numbers again today to determine what would be the best tax rate to achieve Government?s revenue needs of $116 million a year, the rate would be in the region of 9.5% to 10%.

To what goods and services the tax will be charged is also another major point that, we understand, had not been finalized.

Government said that its plan is to implement the new tax in time for the 2006/2007 budget year, which begins on April 1, 2006. The tax debate could be open for up to three months after its first reading tomorrow.

Along with the abolition of the sales tax, Government also plans to revise the rates of import duties, remove the revenue replacement duty and restructure the excise tax system.

Exactly what the structure of the new GST will be has not been officially announced, but details of the proposed rate, as well as the list of goods and services that will be charged at 0% and the categories for exemption are expected to be announced tomorrow, Friday.

According to GOB, the advantage of the GST over the existing sales tax is that it provides the easiest way of eliminating the cascading effects that are caused by the sales tax. This means that though the rate is 9%, because of the manner in which it is charged, consumers at the end of the purchasing train may, effectively, end up paying a higher rate.

Last week?s Cabinet report said that Cabinet was considering the first stage of the implementation of the new tax, following a report by Hon. Jose Coye, who chairs the Tax Reform Commission.

Tuesday meeting was to, supposedly, finalize its consideration of the new tax, as well as the legislative mechanism to be put in place.

The bill that will be tabled tomorrow would be a modified version of the VAT Act of 1996.

Zero-rated items considered are all exports, basic foodstuff (rice, flour, beans, sugar, etc.), some agricultural supplies, and some education supplies.

GST may be applied to water also; however, the current proposal is for the GST to be applied on light bills only if they exceed $150 to $200.