Get ready for the new taxes tomorrow because, tonight, on the eve of the March 1st deadline for the implementation of new taxes, there has been no agreement between government and the Trade Union Congress so the taxes will roll into effect. As you may recall, on Friday February 11th, both sides signed on to an 11-point agreement committing to work together to review the budget. That Budget Working Group began work on February 15th. Seven meetings and countless hours of debate later there has been no resolution. The Trade Union Congress today held a press conference to explain why. TUC's Zenaida Moya says the sticking points were taxes, specifically government's refusal to collect $63 million in taxes in 3 areas.
Zenaida Moya, Trade Union Congress
"We still have in contention two areas. There is a particular $17.9 million that the Union has found has accumulated which a particular bank has not paid since 1998. The auction sales for Port of Belize was a further $1 million that the Union proposed and we agreed that it could be dealt with as a miscellaneous
revenue. We also have in contention a particular $4 million that we feel, that we found out, have not been included for the increase for the PIC bank and we have since included that and that is included into our $63.1 million. We maintain sin taxes, specifically on beer, they have still not done enough; I don't believe from $3.60 to $4 cut it."
Victor Recinos, Trade Union Congress
"The contention is the excise tax on beer. We have agreed with excise on tobacco and soft drinks, those will be no problem."
Ann Marie Williams, REPORTER Newspaper
"What did they say about the excise tax on beer?"
Victor Recinos,
"Their contention is that at $13.66 the law of diminishing returns will hamper Mr. Bowen."
Zenaida Moya,
"I'm not even proposing an increase in beer. But even with a slight increase in beer, the demand would not go down; consumption would not go down. No one would need to lose their job and there would be no increase in other taxes."
Victor Recinos,
"They proposed (a) value in the budget saying they will take it to $3.60 but they still have not been able to prove that so we maintain that $13.66 is the best way to go."
Zenaida Moya,
"Without staying solely on beer, let me just say that $17.9 million is crucial. Collection of those $17.9 million is extremely crucial and that doesn't even include if we add in the interest that should go on to that $17.9 million. So that is an amount of revenue that the government definitely needs to collect. If they were to collect those amounts, clearly they would not need any further increase in tax that will affect consumers. We tried to ask about the explanation as to why that $17.9 million has not been collected and the relevant authority, the Income Tax head, could not give us a response. They did inform that we should ask the Minister of Finance so he could not give us a response."
So what will this mean for your pocket? A government release this evening stated clearly that the revenue measures passed in the House back in January will be implemented tomorrow March 1st. That is, with the exception of the environmental tax, which will be charged at 2% instead of the proposed 3% percent, which is a 1% increase; and excise tax on local beer will be increased to $4 a gallon, up from government's first proposal of $3.60. Victor Recinos who represented the TUC on the Budget Working Group says the decision on to tax or not to tax starting tomorrow rests with Prime Minister Musa.
Victor Recinos,
"It's all up the Prime Minister to call the shots come 1st of March - whether or not he will listen to us and reason and introduce only the measures that we have proposed or go with his first proposals and whatever happens after that."
Jules Vasquez,
When you wake in the morning, what are you expecting when you go buy your cigarettes or your soft drinks? Are you expecting it to be back up to $1.75? Is that what consumers should expect?
Zenaida Moya,
"Well since they did not state that they were not, eventhough we asked them to please hold back on the areas that the TUC did not agree on which include the environmental tax, we had said 1% and maintain that position, and they have gone up to 2%, and they have not told us that they are not going to suspend that tax, as we had asked, I believe it would be safe to say that there will be increasing that environmental tax that will go across the board on items. They can also come though tonight and have a change in mind, of which I am hoping they will, and they will indeed hold back on that extra 1%."
Jules Vasquez,
Do you believe that the interest and the well-being of the citizens at large, especially those who are unable to pay the taxes, is being sacrificed on the altar of special interests, specifically the owners of the this PIC Bank, who I will say is the Belize Bank and Mr. Ashcroft, and the owner of Belize Brewing Company who is Mr. Bowen? Those special interests are creating a situation where people have to pay taxes in order to compensate. Is that the characterization?
Zenaida Moya,
"Well Jules to any person out there I think that is a fair conclusion. I feel that if government is serious about ensuring the welfare of poor and the working class, we have showed them that even with an increase in excise on this beer that nothing should change; those who buy beer will continue to buy beer so why not tax in that area and leave the poor working man and woman on the street. So I would say that yes I could see how in the two particular areas how the working and the Belizean citizens, the regular J and Joe on the street, their own welfare is at stake here and their own welfare is being held ransom by two large companies, and the government needs to look into that area and make a decision. As we left, it doesn't seem like the government wants to hold these two big entities, they don't want to do anything to these two big entities."
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