Today, local government leaders from 7 towns and 2 Cities fathered at the Biltmore to learn how to tax you better! It’s called “revenue enhancement” and the event is organized by the Mayor’s Association – after all, to keep your municipality going, city and town boards have to generate revenue.

Ideally, these towns and cities leaders want to be independent, and able to fund their own programs without having to rely too heavily on the government subventions.

We spoke with the coordinators about the ways that revenue generation is expected to improve:

Eugene Palacio - Director, Local Government

"What we have is a first of a series of training at a aim of capacity building of the council, strengthen the capacity of the council to carry out their functions. Local government is set of roles and responsibilities given to a municipal council by the central government and a set of revenue sources which they administer to carry out those sources. And so the mayor's association met with the ministry, the minister and the ministry and identified training needs as one of their priorities and the ministry accepted that. And so in collaboration with the mayor's association the ministry is having a series of training with the municipalities. This is the first one. The first one is budget preparation exercise and revenue collection enhancement."

Mayor Darrell Bradley - President, Mayors Association

"The city and town administrators together with the mayor's association determine that the topic has to be revenue enhancement and budget and planning because that's a significant challenge that confronts the municipality. So that today we have presenters like Troy Smith who's the valuation for the city council. He is presenting on the valuation role, how to keep the role accurate and some of the challenges that are there. We have Margret McKenzie who is the legal council for Belize City. She's talking about the regulatory framework and the authority of the municipality vis-à-vis all the various licensing and all the various revenue components of the municipality. We also have other presenters from other municipalities who will be speaking. We have representatives from the ministry of local government and this is being done in partnership and collaboration with the ministry of local government - so that Eugene Palacio the director of local government is very very in tune and he's here throughout the whole day assisting us with the set up and of course it's been sponsored by the ministry of local government in partnership with the Belize mayor's association. But the idea is that municipalities can solve a lot of their challenges if we work closer together."

At the end of today’s workshop, Mayor Bradley and Local Government Minister Godwin Hulse handed out certificates to the participants.

The Mayors Association has agreed that they want the technical leaders from the different municipalities, namely city administrators and other key persons, to meet every 2 months. Also, the Mayors are want to have an exchange program where leaders from the different municipalities get to temporarily transfer to another town or City Council.

Taking the Bite Out of Trade Licenses And Property Tax

And keeping it right in line with revenue generation, as you heard in the interview, the collection of property taxes and trade licenses is a major part of revenue generation for a municipality. For the 2 past years, the Belize Chamber of Commerce has been trying to work with the Belize City Council to bring down trade licenses fees and property taxes for businesses.

The task force has concluded that the city’s current tax regime is too arbitrary - penalizing businesses owners who have large properties but who do small volume business. On the other hand, they say it gives tax breaks to high volume businesses - such as law firms and accounting firms - which have small property spaces.

After exploring different options, the proposal is to lower the property tax by as much as 50%. That would mean that the city’s revenue would decrease dramatically, right? Not necessarily, says Mayor Bradley, and he explained that it incentivizes more business owners to launch startups in Belize City. And in the meantime, the Council is weaning itself off the dependence on hyper-taxation:

Mayor Darrell Bradley - Mayor, Belize City

"The areas where we've gotten consensus about is that at the very least we should reduce the rate from the current 25% to 12.5%. So what that will result in is that will cut your trade license bill in half. So we're still going to keep the current regime which is based on square footage, which arguably has it's own challenges because you're talking about the arbitrariness of collecting square footage and where you are in the city - a downtown versus Mahoganny street or in a no commercial area of Belize City. It still has challenges but one of the things that we think would be a huge impact is that if we cut the rate - because I've maintained this is just too high. You want to promote business development in Belize City you have to be reasonable, you can't be overtaxing people - and 25% of your annual rent of value is unsustainable for city that's competing with Ladyville and Hattieville which have no property taxes and no trade license, so that we need to get our act in order and I think one of the best outcomes is if we just say at the very least, let's cut this thing in half."

Daniel Ortiz

"Sir but doesn't that affect negatively the municipality having immediately less revenue to collect? "

Mayor Darrell Bradley - Mayor, Belize City

"Not necessarily, you have too look at issues of boldness and vision. So what we're looking at in terms of our rationale is volume rather than taxing the people who currently pay. One of the things we are eagerly trying to advance is the development of the northern highway. If you go along the northern highway, you're going to see the amount of businesses going up there."

"One of the approaches here as opposed to just kill the few people who pay trade license, if you lower the rate and you encourage and enabling environment in terms of promoting more businesses, particularly small business then you go to poll. And opposed to having 10 people pay 25% you can have 1,000 people pay 12.5% and your volume overall will increase."

Daniel Ortiz

"But until you get that buy in, will there be an immediate short term cash flow issue?"

Mayor Darrell Bradley - Mayor, Belize City

"We're planning on this. When we did the municipal bond we gave up our subvention and we gave up our head tax, that was 2 years ago and the city is doing well. We haven't had significant issues. We're doing a little bit better. We still have problems, we're operating with less revenue but your city in moving forward."

According to Bradley, there is also an addition to this proposal which sets a flat rate for micro- businesses operating in the City, so that it is not burdensome to the owners.

Channel 7