The 2011-2012 Budget was presented in the House of Representatives this morning. It is called Celebrating Growth, Sustaining Recovery and is to come online on April first. Before we get into the full figures, there’s a projected deficit, an increase in recurrent expenditure due to the wage bill and a slight increase in revenue and grants. But a few bright spots: as promised there will be no new taxes; taxes will be removed from kerosene and for good measure, the PM announced that an expected price hike in the price of fuel tonight, will be held-off. The flip side is that it is only a one time deal and prices will continue to go up thereafter.
“For effective this very day, we will signed into a law a statutory instrument that will zero rate the GST on gasoline, illuminating kerosene and diesel. In its place, we will increase the import duty on gasoline and diesel at a fixed specific rate amount. This amount will not be equivalent to what the GST take is currently—at over one hundred U.S. dollars per barrel, but it will be equivalent to what the GST take was when the world oil prices were in the U.S. eighty-five dollar per barrel range. In effect Mister Speaker, the Government will no longer gain, however slightly, from any rise in international oil prices. To repeat, we are in fact, rolling back the effective tax a little by import duty substitution at a rate equivalent to the GST position that existed in the idle of last year as oppose to the higher GST position that obtains now. But we go further, Mister Speaker, for we will not applied the makeup import duty to illuminating kerosene. This is mainly used by the poor and is currently import duty free. So we will now remove the GST from kerosene and replace it with nothing. There is a shipment of fuel due today and the pump prices were to increase by about a dollar twenty Belize per gallon for gasoline and a dollar Belize for kerosene and diesel. What government will do is, as I indicated, remove the GST, but for this shipment alone, we will not impose the substitute import duty. We will therefore make a huge revenue sacrifice. But I must caution, Mister Speaker, that this is a one time only gesture. When the next shipment after this arrives, around the end of March, it will have to be subject to the new import duty in lieu of GST. Because of what we’re doing and not imposing the GST or the substitute import duty, instead what will happen with the shipment coming in tonight, the price will go down to ten-thirty-nine for premium, ten-thirteen for regular, eight-thirty-six for kerosene and nine-sixty-one for diesel.”
John Briceño, Leader of the Opposition
“What he did skillfully, politically, is that he talked about not increasing the cost of fuel that would have gone up by about a dollar and twenty cents; but for one month. Obviously he is trying to remove that whole anger form the Belizean people with his budget—trying to find a way to ease that just for two weeks because as we all know shipments come in every two weeks. And he has already admitted that the price of fuel is going to go up in the next shipment that is going to come in.”
Barrow says that the government’s loss on the shipment of fuel is one million dollars.