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“We have to look at the bigger picture” – PM on fuel taxes

General“We have to look at the bigger picture” – PM on fuel taxes

BELIZE CITY, Thurs. Mar. 24, 2022– It was reported this week that farmers in the northern districts will be paying 70 cents more per gallon of diesel after an apparent decision by the Government of Belize to cut their fuel subsidies — a decision made at a time when fuel prices continue to soar. It was understood at the time of the announcement that subsidies for cañeros in Orange Walk and Corozal would fall from $4.14 and $4.15 per gallon respectively to $3.44 and $3.45. In other words, the farmers will now be paying 16% more in fuel taxes. (In regard to the reduced subsidies for caneros, Prime Minister Briceno subsequently told 7News, “The subsidy is based on gallons and not the dollar value. The cane farmers are still getting the 1.4 [million] gallons, as they did over the past years. The tax on diesel has been reduced by over $1.30 per gallon, so the dollar value is reduced.”)

UDP deputy leader and area representative for Corozal North, Hon. Hugo Patt, spoke out against the cut in a statement posted online, calling the Briceño administration “cold-hearted” and “unsympathetic” for the move.

But cane farmers aren’t the only ones that will be suffering from the proverbial “gas pain,” as the prices of regular and premium gasoline have continued to inch towards the $15 mark over the past few weeks. Just recently, a 66-cent increase in the cost of regular fuel on March 24 took the price from $12.84 a gallon to $13.50—more than the price of premium gasoline, which stands at $13.46 a gallon for now. Meanwhile, diesel is currently being sold at $13.41 per gallon.

The Government of Belize Press Office issued a release regarding the lastest increase, attributing it to the acquisition price of the fuel and also pointing out that the Government had reduced all levies on regular fuel by 29 cents so as to keep the price at the current level. According to the release, the Government has been engaging with stakeholders to discuss options for lessening the financial burden that has been placed on everyday citizens and has spoken with Belize’s principal fuel importer, Puma Belize Ltd, about “the imperative of competitive acquisition and pricing.”

Last week, we reported that the Government was set to meet with the private sector and other entities to discuss the rising fuel prices and ways to mitigate the effects being felt. In an interview with local media this week, Prime Minister John Briceno revealed that a meeting, which was held with representatives of the Belize Bus Association, the churches, the NGO community, and other social partners, was a fruitful one, and noted that most of the entities understood that rising prices are a direct reflection of what is happening elsewhere in the world. He also revealed that the Government has been discussing the potential for a Fuel Stabilization Fund, which will be used to keep fuel prices consistent or at least allow for more predictable price fluctuations.

The Prime Minister also spoke on the decision to cut cañeros’ fuel subsidies, as well as what many have deemed a lack of effort by the government in reducing the amount of fuel tax being taken from citizens to ease their gas pains. In doing so, Prime Minister Briceño took a defensive stance, suggesting that persons aren’t looking at the bigger picture and that they’ve forgotten his administration inherited a broke government.

“We have to look at the big picture. If we cannot collect the taxes—remember they [the previous administration] left us bankrupt. The UDP left us borrowing one million dollars a day. You forget that man. I have to remind you,” he stated.

The Prime Minister said that while he wishes they could be rid of all taxes, they “just simply cannot”, reiterating that his administration inherited a bankrupt government. In the recent press release, the Government Press Office noted that, in the case of diesel, the government reduced the tax component by $1.17 to keep its price at $13.41—a reduction that represents a loss of $17 million of anticipated budget revenue.

When asked why not focus on other forms of taxes—such as taxes on goods and services—rather than solely the fuel tax take, the Prime Minister stated that the economy needs to grow first.

“We can’t tax the farmers even more as it is right now, because they are struggling. And if we then go and raise the taxes on our importation, then what is going to happen? You’re going to have more contraband and then they’re going to pass that cost onto the consumer,” he said.

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