7 News Belize

Chamber Challenges Fuel Tax, PM Scoffs
posted (June 22, 2018)
The Belize Chamber of Commerce and Industry has written to the Prime Minister asking for a meeting to discuss lowering fuel prices. The Prime Minister has written back saying, he's doesn't see a solution, but he is still open to a meeting.

In a letter dated June 14, 2018, PM Barrow wrote to Nikita Usher, the Chamber President, responding to their letter.

The Prime Minister says, quote, "After asserting that there is room for GOB to reduce its current excise tax on fuel, you end with a request for a meeting to discuss solutions that would 'allow for some relief to the private sector, without eroding the Government's revenue base.'" End quote.

On that score, the Prime Minister expresses skepticism, saying, quote, "...I would be happy to meet with representatives of the Chamber's executive...to see how we can reconcile the irreconcilable." End quote.

He then points out that fuel taxes are some of the broadest based taxes available to any government. Any significant reduction in those taxes will, quote, "immediately blow huge holes in the Government's budget".

That shortfall would have to be made up somewhere else, and he proposes that the options to do this are few. One solution would be to increase the GST rate from 12.5% to 15%, the environmental tax from 3% to 7%, and or to increase the business tax from 2.5% to 3.75%. He then points out that all those changes would represent a shock to the consumer, and the business sector would suffer more than it currently is with the fuel taxes.

Another solution could be that the Government could implement an across-the-board salary cut of 12% for all its public officers. Alternatively, the government could terminate some 3,000 officers in the junior grades, or pensions could be reduced by 55%.

He then points out that all of these options would be extremely unpopular with zero chance of success. The PM then asks the Chamber President to share, in advance of the face to face meeting, whatever sort of fuel tax alternatives that the Chamber would propose and be prepared to support.

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