Saturday, March 12, 2011
BELIZE BUDGET SPEECH SUMMARY, FOR 2011.
BELIZE 2011 BUDGET SPEECH, from the Prime Minister of the UDP party holding the reins of government.
Prime Minister of Belize and Minister of Finance Honorable Dean Barrow presented his 2010 financial budget to the House of Representatives on Monday, March 15th, 2010. During his speech, Honorable Barrow stated that General Sales Tax would increase in percentage, from 10% to 12.5%, a 25% increase. The budget bearing the name Recovery Today, Prosperity Tomorrow, outlines the $876 million spending plan, which will be financed with $700 million in tax receipts, $127 million in financing, $80.7 million in non-tax revenue, and $22.5 million in grants. However, the budget also makes provision for $63 million in amortization of Government’s debt which currently stand at $3 billion. ( The PM said $2 billion but my off the cuff, mental calculation say it is $3 billion. )
The following are the changes to the previous 2010 BUDGET slated for 2011.
During his speech, Honorable Barrow explained, “We need to take the very difficult but unavoidable actions necessary to close the gap. Accordingly we will, these are the new tax measures: increase the business tax for supply of electricity services from 1.75% to 6.5%. This is only for the supplies of electricity and this is projected to yield an additional $10 million.
Second Mr. Speaker we will impose an excise tax on locally produced crude oil at a rate of $1 per barrel, projected to yield $1.8 million per annum. This is to provide additional revenue to government and is done especially to increase road maintenance on the Western and Hummingbird Highways necessitated by the transport of the crude oil to the port in Big Creek. Finally, Mr. Speaker we have to increase the rate of the General Sales Tax from 10% to 12.5%. This will yield $42 million. We have had no choice in this matter. But even as we raise the GST, we are mindful of our promise to protect the poor and the local income earners. Therefore we are also proposing a slew of tax relief measures, designed to insulate the most vulnerable. The GST is a consumption tax and so we want to do two things: the first is to ensure that the absolutely essential items and in particular food stuff will actually see a drop in prices notwithstanding the generalized GST increase. In other words, basic ingredients for the average Belizean family’s everyday meals should now see a price drop after this budget.
Second, we want to increase the purchasing power of the fixed income people who are at the margins. Accordingly, starting with this latter point first, we are increasing the basic income tax deduction for employed individuals earning less than $24,000 per annum. This in effect would mean that all employed individuals earning less than $24,000 per annum will be exempt for tax while those individuals earning more than $24,000 will continue to be eligible for the current basic deduction of $19,600. Furthermore this change will take place retroactively to the tax basis year commencing 1st January 2010. So under this UDP Government no person with a salary of $500 per week or less will ever again have to pay a single penny in income tax.
Then Mr. Speaker we come to the removal of import duties. We are doing this on a wide range of food items, powder laundry detergents, agricultural equipment and machinery including tractor parts, agricultural packaging materials, and basic school supplies. I say again Mr. Speaker that we are trying to reach a point where import duties will be eliminated all together, save and except only in areas necessary for the protection of local industries.” The sales tax increase will provide an additional $42 million in tax revenue and being a consumption tax, the $40 million will be paid by tax payers. While there were few highlights in the budgetary review and the preview of a year that will be marked by a tax increase, the Prime Minister said government remains committed to alleviating pressures on the poorest of the poor. Honorable Barrow explained, “In the context of the limited resources available to us and based on the information from the two previous year’s budget consultation processes, we will continue to emphasize education, health, and physical infrastructure. We believe the progress already made in all three areas is undeniable and of that we are immensely proud. The greatest emphasis will be on poverty reduction and social protection with programs aimed at alleviating poverty and providing a safety net for the marginalized and the disadvantaged. Let me therefore the larger of these new social sector and poverty alleviation programs. The first is a conditional cash transfer program. This is being funded with $4 million from local resources and will target the deprived and disadvantaged in both urban and rural areas. Again we will look particularly at youth and single mothers. The program will give cash in return for the beneficiaries engaging in activities such as immunization, school attendance and health and family education. We have every expectation, every confidence that this initial $4 million will be boosted by assistance from the World Bank who has already indicated their interest in helping with this program. So this is only an initial $4 million.
Then Mr. Speaker there will be a food assistance program with an initial $1 million to provide at a subsidize cost basic food items to the elderly, poor, and marginalized and to single mothers and their children. We’d have to start this as an apprenticeship program with the $1 million and we will locate it on the southside of Belize City, that is where the project will take place.
Next Mr. Speaker, we will reactivate a countrywide apprenticeship program with another $1 million. This was first successfully done under the 1984 UDP government and will see us pay young people to learn a practical trade by way of apprenticeship to skilled persons.
I am determined therefore that this democracy, this economy will be vindicated by the open, honest, caring, husbandry of the UDP. At a particularly difficult juncture of this administration, I want to thank the people for their understanding. I and the UDP, to paraphrase Abraham Lincoln, continue to do the very best we know how, the very best we can, and we mean to keep doing it until the end.”
To the read the budget speech in its entirety, kindly follow this link: http://www.belize.gov.bz/public/Data/031515591071.PDF.
Belize Debt Figures are vague so far: We seem to have a total of $3 billion in debt? The increase has been constant borrowing over the past three years. There is no GDP figure available yet, to do a ratio calculation of the Debt to GDP. To see where we stand economically under the governance of the UDP.
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