There is going to be a House meeting next Thursday and at that time the Prime Minister is expected to present the amendment to the business tax for telecommunications companies, increasing the rate from 19% to 24%. But yesterday, the Finance and Economic Development Committee held a public hearing on the controversial bill. Both BTL and Speednet, the parent company for Smart phones, made representations. They both lamented the increase and warned that it will drive up rates, force layoffs and stop investments generally, but specifically for rural access to telephones.
Those are the arguments they have been making, and today the Prime Minister said from what he heard from his representatives in the meeting, there was nothing new which would convince government to desist from proceeding.
Hon. Dean Barrow, Prime Minister
“I haven’t heard anything that persuades me that we ought not to proceed.”
Jules Vasquez,
That will provide some additional revenue but for this fiscal year, the revenue shortfall I understand will be $60 million. How will you finance it?
Hon. Dean Barrow,
“Well first of all I don’t know that that is so. Nobody has told me that. I have to speak to my officials in the Ministry of Finance. That doesn’t appear to me to be accurate.”
Jules Vasquez,
How much will it be?
Hon. Dean Barrow,
“I don’t know but I don’t think of the order of $60 million. In any event, what I think we need to be concerned about, will there be money, apart from the operational expenses, salaries, that sort of thing – will there be money for public investment. Will there be money for job creation, will there be money to improve the quality of life for Belizeans and I can assure you that there will be. And so I am completely confident that we will come through this relatively swimmingly.”
Jules Vasquez,
But I am saying that there is a material limitation that you have to somehow finance this shortfall, either by cut backs in spending or supplements.
Hon. Dean Barrow,
“Well no I think what we’re looking at is the inability for example to give the increases that the public officers and the teachers are already clamouring for. For sure in terms of recurrent expenditure, we will have to try and hold the line but I am saying that the most important expenditure component which is the public sector investment program will not suffer because of all these flows that we are able to attract for various reasons, including the fact that we are running a clean operation.”
Jules Vasquez,
Sir and then I know the IMF is pressuring you to increase taxes.
Hon. Dean Barrow,
“Well there has been that suggestion yes. They are talking about the GST and they are talking about bringing back now the taxes in their former incarnation on fuel. I hope that we can resist that sort of suggestion. As of now we have certainly resisted the suggestion. We’re going to find a way, we’re going to find a way.”
Jules Vasquez,
Sir the Economist Intelligence Unit projects that your deficit will be 3.4% of estimated GDP.
Hon. Dean Barrow,
“You know you have to be careful about these suggestions and you have to be careful about these economists. I don’t accept that that is accurate but I am telling you, we are going to be okay. I will not, there will be no message of doom sent out from me from Belmopan to the Belizean people - we are going to be okay.”
Jules Vasquez,
Do you have a revised target for your deficit percentage as a percentage of GDP?
Hon. Dean Barrow,
“No we haven’t gone there yet. We are in the process now of looking at the numbers. Remember that in terms of the figures there is still a quarter to go but I don’t know, I understand that it is your job to try and pin me down but I am telling you we are going to be fine.”
Jules Vasquez,
But you sound like you have a magic wand solution.
Hon. Dean Barrow,
“Well all options are on the table.”
The House will have an unusual Thursday sitting because the Prime Minister has to attend a Petrocaribe Summit on Friday.
