The general sales tax was introduced a year ago. On July first 2007, there were whispers of doubt from the private sector, cries of gouging from consumers, and quiet worry from Ministry of Finance technocrats. Well it's worked out nicely for government, as the GST is a tax engine - proving to be cash positive and not revenue neutral pro government. Businesses too, have found that claiming back tax credits creates savings. Seems that the GST works out for everyone, except consumers. And today as the GST office was celebrating the one year anniversary, we asked when will the prices go down?
Jules Vasquez Reporting
$186 million - that's how much general sales tax Belizeans have paid in the year since it was introduced. And this chart shows that the receipts have been increasing almost every month - as the technicians get better at administrating it the tax and closing up the loopholes. Deadlier than the VAT, more efficient than the sales tax that preceded it - today's open day showed that when it comes to tax, the GST is boss. But the sales tax staff wasn't here to boast today.
Beverly Castillo, GST Commissioner
"Part of what the principles that we built the GST on is transparency. If you look around us, all our information; revenue, the number of registrants, audits, enforcement and collections - everything that we've been doing we're showcasing."
A showcase, but with a celebratory air. But really, since when did a tax become something to celebrate?
Beverly Castillo,
"We're really celebrating the fact that we have had compliance. We're celebrating the fact that people participate. We know that people complain but that is good because we hear them and we know how to make our adjustments to improve on the administration and taxes are necessary evil. It is something that we have to pay."
All except registered businesses who get tax credits refunded to them. General Manager of the Chamber Kevin Herrera is a fan.
Kevin Herrera, General Manager - BCCI
"The important thing Jules is that it is fair to everybody and that it performs the way it should."
Jules Vasquez,
But you all are partnering with it and are praising it because it is a consumer tax and we the consumers are the ones that pay. You business owners and membership don't pay. So of course you all will be hand in hand with government on it.
Kevin Herrera,
"Its nice to know that businesses are not consumers. I thought the opposite."
Jules Vasquez,
But you all can claim back the credit.
Kevin Herrera,
"But still everybody is a consumer that operates in the system."
Jules Vasquez,
When the GST was introduced, it was said that there will be a one off price spike because of the double taxation that was happening in the change over period but consumers will argue that in fact since GST has been normalized and the importers are getting back their credits, in fact prices have not gone down, prices remain up.
Beverly Castillo,
"Yes but Jules that is a not a GST issue, that is a businessman's issue."
Kevin Herrera,
"All the businesses that I speak to, that I know, would love to give consumers a break and would love to have their prices at the lowest possible and I think many of them do. But there are many factors contributing to do that."
Jules Vasquez,
So but you would agree that the prices that went up in July of last year have not come down.
Kevin Herrera,
"I think many of them came down. I don't know if all of them came down. Like I said, I think for a while prices have been, if you like for a lack of a better word, artificially low in some cases."
And while Herrera defends his members' interests, he says that the tax regime does need work.
Kevin Herrera,
"Taxes are too high in this country, that government has been operating very inefficiently, it has been using our money for purposes that they shouldn't have and that has led to the hike in the taxes over the past years and we saw this especially in 2005 when we demanded certain things. So I think we all agree that taxes are too high in this country."
And with revenue like this for a GST that continues to over perform - it's left to be seen if in a year of election -the government will also feel the taxes are too high.
In his budget speech, the Prime Minister said that the tax reform committee was tasked with reviewing the GST and make suggestions for recommendations. Their report was to have been submitted by June 30.
