General

Increase in fuel import duty Only one tax increase, Barrow promises is the higher tax on fuel imports

By Marion Ali, Assistant Editor

The two adjustments in fuel import duties since December 2015 are the only tax increase that the Government will impose for the 2016/2017 fiscal year, sPrime Minister Dean Barrow announced at Tuesday’s budget presentation.

The last adjustment in February brought the price of diesel to $7.52 a gallon, regular gasoline to $7.98 a gallon, and premium gasoline to $8.99 a gallon. These translate into a tax increase of 80 cents a gallon on diesel, to $2.72 a gallon; an increase of 30 cents on regular gasoline, bringing the duty per gallon to $3.03; and an increase of 40 cents on premium gasoline, making the import duty $3.36 a gallon.

Barrow said the increase in fuel import duties will bring an additional $50 million in much-needed revenues to the government’s., needed especially now that Belize’s earnings on the crude petroleum produced by the Belize Natural Energy Limited (BNE) have dwindled due to low texport prices.

“We have factored in the full year effect of the adjustment in import duty on fuel products…which was implemented in December 2015 and in February 2016. This is xpected to yield an additional $50 million. Mr. Speaker, it is estimated that the fall in oil prices since 2014 has resulted in windfall savings of over $163 million to Belizean consumers. At current prices, even with the import duty increase, the consumer will still keep in excess of two thirds, or more than $100 million, of the savings,” Barrow isaid.

“That is the only revenue -raising measure we are taking. The technocrats spoke to us about GST, about moving from zero rated to taxable; about moving from exempt to full taxable. We are determined , even in a time of change, not to burden our people. We feel completely justified in pulling back just that small portion of this huge savings so that government can continue to operate fully and effectively and so that we burden nobody with any tax increase. We have done remarkably well!” he continued.

Prime Minister Barrow later told the press that the technocrats had suggested making adjustments in the General Sales Tax (GST), moving from zero-rated and tax exempt to taxable. But , he said, his government was reluctant to “burden” the people with any more taxes. He explained however that tax adjustments will have to be made when acquisition costs on fuel change, but it would also have to be balanced against falling revenues from crude exports.

“I’ve seen schools of thought that suggest that we haven’t hit the bottom yet and that prices could go as low as $20 [US a barrel], and they will not start to go back up before the end of ….the calendar year. So, if and when that does start to happen, … we will have to manipulate the import duty application some more,” Barrow said.
“By then of course, it will not be import duty, it will be excise – part of what we are doing in the removal and moving to an excise regime on imported fuel and fuel products as well. But by the time we may have to do that, if in fact we have to do it, I think we will be well on our way to making the target we set for ourselves,” the Prime Minister indicated.

Opposition Leader, John Briceno, was not impressed by the increase in import duties on fuel . He criticized the government, pointing out that high fuel prices cripple the economy.

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