By Benjamin Flowers
Increased revenues from taxes, widening recurring expenditures, decreased Capital II spending, and a fulfilled promise to avoid retrenchment, are only some of the highlights of the Government of Belize’s 2017/2018 National Budget.
Prime Minister Dean Barrow presented the $1.18 billion budget on Monday, accompanied by his speech “Bouncing Back – A bold Belizean Recovery.”
Belizeans can expect the price of goods and services to increase, as GOB seeks to make $1.134 million in revenue in the upcoming fiscal year, which is some $80 million above what it made last year. Of the total revenues for the new fiscal year, 48.7 percent will come from taxes on goods and services.
New taxes on beer, stout and soft drinks, are expected to raise $28 million, while persons who consume more than $100 worth of electricity in a month will have to pay General Sales Tax (GST). Lowering the electricity tax threshold from $200-$100 is expected to generate an additional $6 million.
Other taxes include $11 million from taxing cigarettes at the Corozal Free Zone, $8 million from taxing fuel and cement, $15 million from increased environmental tax on imported goods, and $12 million from an increase in departure tax.
Of the remainder of revenues, taxes from income and profits will make up 23.9 percent, property taxes 0.5 percent, non-tax revenue 8.9 percent, and international trade transactions 18 percent.
Government will also require that statutory bodies give 10 percent of their 2017/2018 income to the consolidated revenue fund.
“Our target is to maintain these gains so that in the coming fiscal years, a primary surplus of at least 2 percent of GDP will be attained,” Barrow said.
Personal Emoluments (salaries), will increase from $408.7 million to $422.3 million, given the scheduled salary increase due to teachers and public officers, scheduled to come into effect on April 1. GOB has, however, decreased Capital II spending from $121.5 million to $66.2 million, effectively saving some $55.3 million.
Government is also freezing spending on utilities, material and supplies for its ministries and departments, keeping with its theme of trying to spend more responsibly. As Barrow had promised at his Superbond restructuring conference a week prior, the new budget has no provisions to increase the General Sales Tax, retrench any public officer, and the standard import duties remain intact. The budget itself is some $58 million less than the previous budget, which was $1.238 billion.
The government will also continue its push to upgrade infrastructure. The new budget calls for Capital III Budget provisions of over $30 million to finance the several Road Infrastructure Projects, including: Continuation of the Belize City South Side Poverty Alleviation Project Phase III; continuation of the upgrading of the Hummingbird Highway; completion of the New Macal River Bridge; design of a New Haulover Bridge; commencement of rehabilitation work on a new sections of both the George Price and the Philip Goldson Highways; and a feasibility study and design of the Caracol Road.
GOB’s push to maintain a primary surplus of 2 percent forms a part of its commitment to the holders of the 2034 US dollar bonds. If the country fails to meet a 2 percent primary surplus for any of the fiscal years leading up to 2021, the government has committed to seeking assistance from the International Monetary Fund in determining the reason for the short fall, and for recommendations.