When the Prime Minister, Hon. Dean Barrow presented the budget for 2011-2012 on Friday March 11th, he asked the Belizean people to be prepared for an increase in the price of fuel. But more than asking for preparation he gave a one million dollar break to consumers.
The way this worked out was that the government removed the General Sales Tax from the shipment of fuel that came into the country on that very weekend and did not replace it with any other tax for that one shipment. It was a one-off gesture but one which proved that the Prime Minister has the citizenry at heart first and foremost after it cost the government one million dollars. Giving tax breaks however is not a sustainable way to manage a country and the Prime Minister explained that on the shipment that was to arrive later on, ten days later to be precise, the government could not afford to absorb any more losses. As such the government implemented a flat tax which would be equivalent to the 12.5 percent GST if it were applied to fuel which cost 85 dollars a barrel.
In speaking with the Prime Minister, he explained that the rationale is to have a fixed rate at which fuel is taxed instead of having a fluctuating figure that goes up and increases the government’s take every time the acquisition price of fuel goes up. The new structure will see a set figure as the tax. P.M. Barrow also explained that while GST will not be charged on the fuel, businesses who once claimed GST will still be able to do so; however, the rate will only be at the 85 dollars per barrel, this is reasonable since this is all that government will be collecting as well.
In addition to the setting of a flat tax on fuel the Prime Minister says he’ll get into consultations with gas dealers to see if they too would be able to consider having a flat rate as their take as opposed to a percentage of the cost of fuel. That, however, is just in the preliminary stages and the Prime Minister explained that he’d first want to get over the budget exercise before those negotiations begins. It is only fair however that if the government can have a flat tax that the dealer’s take is also flat.
