The Economic Development Council (EDC), in collaboration with the Inter-American Development Bank (IDB) and various government agencies, have launched a full review of Belize’s trade and tax policies regime, with the intent of finding ways to create a more business friendly environment, while simultaneously preserving the tax base, EDC’s Amparo Masson explained recently.
Masson shared that while the review officially commenced June this year, when the Trade and Tax Policy Committee was formed, taxation emerged as a specific priority reform area from as far back as the first Prime Minister’s Forum, which was held in 2011—when the progenitor to the current EDC was first established. “It’s a very involved process, and we are taking care to ensure that these policy recommendations and, by extension, eventual policy changes lead to the desired outcomes.”
Masson went on to explain that as far back as February 2012 the International Monetary Fund had already analyzed the tax regime to get the discussions on the way forward started. “The process, though in some ways arduous, will culminate in a trade and tax plan that is efficient, simple, and equitable,” she added. According to Masson, the idea is to also utilize innovative ways that will also contribute to the stimulation of economic activities and the improvement of the Belizean private sector’s level of competitiveness as it relates to trading across borders.
“The overarching idea is that the changes will broaden the tax base, while simultaneously encouraging investments, strengthening the private sector’s international competitiveness, and, of course, fostering economic growth in Belize,” Masson underscored. “The all-encompassing study includes a review of import duties and taxes, export fees, the fiscal incentives regime, the tourism tax regime, personal income tax, business tax, GST as well as the administration of taxes.”
It is for the afore stated reason that the completed Trade and Tax Diagnostic Study is expected to provide recommendations as it relates to reforms regarding indirect taxation, income tax, and tax incentives policies. The completed study would also include a model that allows government officials to quantitatively assess different tax and trade reforms scenarios.
The World Bank’s Enterprise Survey, conducted in 2011, had also revealed that while only one-fourths of private sector representatives had identified the tax administration process as a “major constraint” to business activity and private sector development in Belize, more 56 percent of 150 entrepreneurs and top managers who participated in the survey said that the rates are the main concern.