– Belize News

 Breaking News
  • TAXI-MAN STABBED BY FEMALE PASSENGER A taxi-driver of a West Street address, identified as Antonio Pech, 52, is recovering at the Karl Heusner Memorial Hospital from a stab wound to his neck which he sustained...
  • COUNCILOR GOODIN STRIPPED The Belize City Council on Friday morning held a press conference to announce that first-term councilor Micah Gooding has been stripped of all of his portfolios following a situation which...
  • 2 People Knocked Down On Amara Av. At approximately 8.49am this morning, 2 people were knocked down whilst crossing the street on Amara Avenue near the intersection with Dean Street. As you can see in this security...
  • Human Skull Found Near The Port Of Belize The Reporter has been reliably informed that a human skull has been found somewhere in the area of the Port of Belize. Sources say it was discovered because a dog...
  • Suspected Drug Plane Landed Late Monday Night The Burnt Remains Of A Suspected Drug Plane Was Found Tuesday Morning Feb. 19th. By Police Near Blue Creek. Information on a suspected drug plane which landed behind Blue Creek...
  • Bishop Wright ‘Highlights The Role Of The Church’ NEWSPAPER -News Staff - President of the Belize Council of Churches, Bishop Philip Wright has said that if any credible allegation of sexual abuse against a member of clergy...

Belizean Economy and International Obligations Part 3

Belizean Economy and International Obligations Part 3
January 18
15:55 2019

In the last Business Perspective (BP) article we concluded with reference to the need for a proactive approach to the tax reform efforts. As was pointed out in that article, in many instances Belize finds itself virtually forced to make certain tax policy changes in response to one international obligation or the other. The more recent examples include the repeal and replacement of the Export Processing Zone (EPZ) Act with the Designated Processing Areas (DPA) regime. The same could be said of the recent amendments to the International Business Companies (IBC) Act.

Clearly, such reactive approaches could be viewed as problematic considering that it is very likely that those external forces have very little concern regarding Belize’s stage of development. Fundamentally, while one would have to be careful to not throw out the proverbial baby with the bath water, it is unreasonable to expect that our idiosyncratic development needs could appropriately be met in this way.

This, however, begs the question as to what, then, is the policy direction worth following? What framework should inform the inclination’s of Belize’s tax reform policy? For this, one could look to the Growth and Development Strategy (GSDS) 2016 – 2020. Particularly, the GSDS’s Necessary Condition (NC) 1.3.4 speaks to “Promoting Inclusive Growth (Growth with Equity)”. The term “Inclusive Growth” speaks to a framework in which economic growth is approached from a standpoint that seeks to minimize inequality. Under this NC, the national strategy states: “The Government of Belize will actively pursue several interrelated actions to improve the likelihood that growth will benefit the poor. Generally, the pursuit of more active industrial policy will facilitate the provision of more employment and wealth-generating opportunities for poor and vulnerable persons and communities. Strategies to improve access to development funding, to provide business development support, and to encourage cooperation, among others, will have a strong focus on enhancing opportunities for the poor and vulnerable to participate in productive activity.”

This goal is buttressed by three sub strategies; namely, to “Identify and develop activities that can provide significant employment and earning opportunities to the poor and the vulnerable population; to also “Pursue inclusive strategies in the development of the tourism industry”, and “Intensify efforts to raise earnings from employment in order to reduce the prevalence of the working poor”.

The fact that Inclusive Growth principles had found its way into the GSDS’s first pillar (achieving “Optimal National Income and Investment”) is a pivotal step in the right direction, because as can be gleaned from the foregoing, Inclusive Growth goes beyond the simply targeting growth in Gross Domestic Product (GDP). Instead, it looks at how said growth is achieved, seeking to ensure that it is obtained in the most equitable way possible.

Now, the conversation in this particular series is about tax reform. Consequently, it may be tempting to ask what the government’s incorporation of this set of principles has to do with the tax structure employed. Well, simply put, instead of tax changes being inspired by external variables, the economy would be better served by that proactive approach that we have been talking about. That said forward-looking approach ought to be informed more predominantly by our own stated strategic goals.

This is a point that even the OECD had noted: “Governments can achieve tax and transfer policies for inclusive growth while also supporting the revenue-raising capacity of the tax system and ensuring the sustainability of public spending.” Said differently, there are comprehensive fiscal policy decisions that are considered useful for achieving inclusive growth. A closer look at these sorts of decisions is where we next turn our attention.

. . . . . . . . . . . . . . . . . .

search bar

Sunbright Ad





Mi Wah Panades