Like it or not on July 1st you will be paying the 10% General Sales Tax. But with only two weeks to go before GST implementation day, do you really know how much you will be paying and on what? Last night we told about concerns from the Chamber of Commerce and Industry but while the business sector looks out for itself, the GST is really a consumption tax which means that, at the end, you, the consumer, will be paying. So the chances are that like most Belizeans you don't know or aren't really sure how it will affect you. Today the Sales Tax Department held an open day to answer all those nagging questions. We were there and have some answers for you.
Keith Swift Reporting,
With only sixteen days to go before the implementation of the General Sales Tax there are still many, maybe too many, questions still lingering: will GST be charged on my light bill, my phone bill, water bill, and will GST be charged on the food I eat. Those questions and more were what people came here at the sales this morning to answer.
Elvira Nunez works at S&L Travel and Tours. She wanted to know if GST will mean higher prices for her tours.
Elvira Nunez, Tour Operator
"We haven't really been informed about what changes are going to be implemented in our business so I had some questions as to on what we need to charge GST. Basically for us it is the same thing, only that we are going to pay 1% more. It was nine percent so now we are going to pay 10%."
The concern was pretty much the same for Errol Cattouse from Mycuz.Net. He is an internet service provider but doesn't know if and how much more he or his customers will have to pay come July 1st.
Errol Cattouse, Internet Service Provider
"The major question we would have is exactly are we going to have to raise our price for our service for our consumers. That is the major question we will have."
Kenneth Gladden came looking for answers for his mother. His family runs a grocery shop and they too wanted to know how the GST will affect their small business.
Kenneth Gladden,
"My parents own a restaurant and a shop, a grocery store, and she would like to know how it will work on her part, how will she put in the new taxes, the ten percent and everything. She gets things wholesale and she sells them at a retail store. She would like to know if this 10% will affect everything else. That is basically it."
The concerns were personal from Amelia Young and Frederick Haylock. Both are
here as consumers and both had three words: how much more.
Amelia Young,
"I think somehow it will affect everybody but we just need the general information. We just want to know how far it is going up."
Federick Haylock,
"I am here as a consumer because I am not really a business person but I just want to see exactly how it will affect me when you go to buy your groceries or getting other services or things like that. That is how it will affect me because GST is a consumer based tax and all the businesses will pass it on to we. So we are the main ones, apart from the business people, who should be concerned to say how it will affect we."
Godfrey Arzu, Sales Tax Implementation Team
"The honest response to that is it depends."
Godfrey Arzu is part of the GST implementation team. He along with employees from the Sales Tax Department spent today trying to answer some of those questions. He says it is a consumer tax meaning you, not the business owner, will be paying more……at least in most cases. How much more you ask?
Godfrey Arzu,
"Under the current sales tax you have some goods that attract sales tax at 14%. The General Sales Tax will be at 10% therefore if you look at that, the rate is going down and therefore the cost of doing business in those goods and services should go down."
- That means that the tax on liquor, fuel, tobacco, jeweler and other high-end goods will drop from 14 to the uniform 10%. That is however the exception.
Godfrey Arzu,
"Most of the goods that currently attract nine percent will move up to 10%. But the difference with GST and Sales Tax is that under Sales Tax the tax that you paid became the cost of doing business but under the GST the tax that you pay is a credit therefore there is no need for the business to markup on the tax that it pays. So you find yourself in a situation whereby instead of marking up on a 9% tax, you will mark up only on your cost, exclusive of the tax and the price will remain the same or if they go up it should be very minimal, less than one percent."
- You will now be charged 10% instead of 8% on your phone bill.
- Those who pay more than $149.99 on their BEL bill will pay 10% GST.
- You will be paying that 10% GST on just about everything else except zero-rated or exempted goods.
- First to the list of zero-rated items:
- There's not much on here other than the basics: rice, beans, chicken, eggs, bread-----you get the drift.
- Next are the exempted products and services. GST cannot be charged water, a bus ride, school fees, your house rent, insurance, medicine, and hotel rooms.
- Businesses that provide these services and supplies will pay GST on their inputs, but you shouldn't because, by law they shouldn't pass it on.
Arzu says a business not registered for GST cannot charge you for it and there are ways to ensure they won't.
Godfrey Arzu,
"Its better to be armed and informed so that you can make wise decisions.
Also I would advise, especially consumers, whenever you go to an establishment after first of July you must insist that unless that establishment has a registration certificate permanently displayed at his place of business, only then can that person charge you tax on the goods or service that you purchase."
Commissioner of Sales Tax Beverly Castillo believes most of the apprehension and uncertainty about the GST is due to a lack of information.
Beverly Castillo, Sales Tax Commissioner
"It's not fear, its misinformation and today is for we to provide just that session, to inform both the businesses and consumers on how the GST will work. Today we are having our ongoing session with the educational program, its part of our publicity for GST to keep consumers and businesses aware of how GST will impact them, what is their obligations."
For Kenneth Gladden the GST is actually quite simple - come July 1st he will be paying more.
Kenneth Gladden,
"What can I say, everyone is getting affected."
Keith Swift,
You are afraid of the GST?
Kenneth Gladden,
"Yes I am because I work and I won't get extra income. The sales tax is 9% and it is going up to 10%. Everything trickles down so when it goes to 10% there the retailers will have to go up with their prices so everything goes up and I stay at the same income so I will be affected no doubt."
If you still have questions you can visit the Sales Tax Department in your district or visit their webpage at http://www.gst.gov.bz.
