Commissioner of the General Sales Tax (GST) Department, Betty-Ann Jones, has denied an unofficial report from sources close to the department that GST will be increased shortly, but confirmed that measures have been introduced to crack down on their collection efficiency.
Jones reminded that Prime Minister Dean Barrow had indicated in his party’s General Elections Manifesto and in speeches leading up to the elections (including the Budget presentation this year), that there would be no increase in taxes.
“We can state categorically that up to now, there isn’t any [increase]. We haven’t been informed. We definitely would have to be informed because we would be the ones to do projections and things of the sort,” Jones said in an interview on Wednesday afternoon. “I don’t think there’s any intention of raising GST in a while,” she added, and summed up the report as “mischief”.
Jones explained that consumers are now being brought into the fray to assist with collections, since GST is a self-policing tax. “I don’t know if people realize the fact that when they don’t get a receipt, that business persons have just gotten 12.5 percent extra profit on their markup…because they keep the tax for themselves…We’re trying to break the culture and get people accustomed to asking for their receipts,” she explained.
In October, the GST unit introduced a monthly raffle for consumers, offering them a chance to win $5,000 on the 15th of each month for each receipt worth $50 or more that they take in to the GST offices countrywide. Receipts that are for transactions or sales less than $50 can also be added up to make for one worth $50. The top prize is a 2016 Rav 4 SUV, to be raffled on July 1st next year.
The culture is that people do not request a receipt if it is not given, and this, says Jones, goes in tandem with a weak law. But in other countries, there is a deterrent to discourage businesses from engaging in dishonesty.
“If we were in Mexico, or even the USA, you don’t have to demand a receipt when you buy. It’s given to you automatically because the fines are so high and they can shut down your business if you’re caught not doing it,” Jones indicated.
In Belize, there are fines for persons who are successfully prosecuted for not issuing tax receipts. For not using a valid cash register receipt , the fine is $5,000 and for not issuing a receipt there is another $5,000 fine.
Valid receipts should indicate the tax identification number, the name of the business and the date of the transaction or purchase. The amount paid for GST should be clearly shown in the subtotal as well.
Because people have been crafty in cheating the system, the GST unit has endeavoured to introduce a Point of Sales System as the standard machine used, rather than a cash register. The machine, highly efficient for its capabilities, lists items purchased, and controls inventory to allow for better auditing. It prevents businesses from offering their customers an extra item for not giving them a receipt, and from using calculators and cash registers that print invalid receipts that don’t record the tax charged. It also prevents employees from stealing from the business when they collect money for an item and do not enter it in the system. This machine, however, is not yet mandatory in Belize, although a few major supermarkets are already using it.
Evan Brown, the assistant commissioner of the GST Department says business owners have evaded paying in GST collected from consumers by importing various types of cash registers that do not record transactions, or machines that can be programmed to their liking. Sting operations, however, randomly conducted countrywide, have yielded a number of court convictions, particularly in the Corozal, Cayo and Belize districts, resulting in fines paid to the government over the past two years. Follow-up checks at these businesses have also led to a second conviction and to fines, in some cases.