Revelations coming out of the mouths of some Senators at their recent budget hearing are astounding.
Most outstanding for me, from 7News’ April 28 news transcript, is this:
Hon. Eamon Courtenay, Leader of Government Business: “We on this side had 3 choices: continue the reckless, unconstitutional, illegal and unlawful spending as was done by the United Democratic Party, and we rejected that; go to the IMF and enter into a program. The prescription proposed by the IMF is to reduce the number of zero-rated GST items and to tax them at the rate of GST, increase the GST. They don’t say it here, but it is 19% they are advocating. They go further to say reduce the exemptions from business tax and, in fact, tax the hotel sector and to go ahead and look for other areas where we can impose more taxes. Let’s not misunderstand their coded language. Reduce the wage bill. That is not only a cut, but they are also advocating a cut in the number of persons employed in the public sector, and they have warned that unless something is done, there will be a disorderly adjustment to the peg. That means devaluation.
“The Honorable Prime Minister, the Cabinet, rejected the IMF road and we have chosen to adopt a carefully calibrated and designed plan that is homegrown, and we believe will get us to a better Belize.”
Excuse me? Three choices including to continue the ‘reckless, unconstitutional, illegal and unlawful spending, as was done by the UDP’? That’s a choice, Honorable Senator?
The IMF prescribes, in Mr. Courtenay’s words, (1) “in fact tax the hotel sector”, (2) “and go ahead and look for other areas where we can impose more taxes”. The second goes hand in hand with what I have been advocating: increased taxing of prized high-end property in the rural communities.
The first is a bombshell in my thinking: tax the hotel sector. Am I to decipher then, that the hotel sector, heart of the tourist industry, our biggest earner, is not being taxed? I sincerely hope I am wrong in that, or Mr. Courtenay misspoke, or was misquoted.
Short-term rental living accommodations in Belize are taxed, at 9% that I last heard, and that includes hotel rooms. I am therefore left to conclude from Mr. Courtenay’s remarks that hotels as businesses registered in Belize are not being taxed on profits. Foreign owners very likely are not paying taxes of any kind to their countries of origin either!
Let me add that a 19% tax rate is where the hotel room tax should be anyway. I know for a fact that Americans pay that or more at home. It is a tax that is added to the room rate and passed on to the guest.
I’ll add this to the stew, taken from a recent ad in April by a real estate agent and shared with me. I quote: “Belize is one of very few countries in the world where foreigners are allowed to own an entire island and receive fee simple title like in the USA. Here we are gifted with beautiful Caribbean waters, world class fishing, diving and sailing, English as the official language, a government keen on island development and TAXES SO LOW THAT IT IS HARD TO BELIEVE (caps mine).”
Now I know of countries’ policies of granting tax breaks to investors, foreign investors in particular. However, do we choose to give them unlimited breaks when our people have been increasingly falling deeper and deeper into poverty over the years?
A homegrown plan? Really?
Come on, now!