Many noted that, for the first time ever, the new budget was announced in January instead of March. Also, it was the first time in history that the Prime Minister did not deliver the speech, that responsibility went to Minister Ralph Fonseca.

    There was some good news as well, such as the elimination of government "waste" and some new duty-free allowances. While the entire document was too long to reprint in its entirety, a complete copy may be obtained by visiting the government website at www.belize.gov.bz The following information contains interesting excerpts from that speech.

    Based on this year's performance, the new rebalancing measures and conservatively projected growth of 4%, we have estimated some $491.3 million in recurrent revenue and $424.4 million in recurrent expenditure. This should provide a recurrent surplus of $66.9 million.

    Capital 2 expenditures will be held to $52.3 million and Capital 3 expenditures to $70.3 million with some $22 million in capital revenue and grants. Amortization payments are projected at $47.5 million. Indexed Environmental receipts are estimated at $7 million. This should leave us with an overall deficit of just under 2% of Gross Domestic Product (GDP) staying within our target of below 3% of GDP.

Rebalancing Fiscal Measures & First Operational Measures

    Commencing immediately, we intend to use the benefits from computerization and broad based consultation to rationalize the entire government's vehicle fleet to standardize, eliminate waste and establish tight mechanically driven controls. Sport Utility Vehicles (SUVs) not needed, will be converted to economical diesel-fueled cars. Large inefficient pick-ups will be similarly replaced by smaller diesel units. Vehicles being used to drive around the corner to the office, but busy at nights or on the weekends for leisure, will end up on the auction block.

    Similarly, with electronic records in hand, a Management Audit Team will carefully analyze and propose remodeling the public service in full consultation with the PSU to ensure that all are at productive work, properly prepared and knowing where they will be going next - based on performance. There will be no retrenchment!

Rebalancing Tax Measures

First in an effort to close loopholes, the Office of Revenue in the Ministry of Finance has recommended the following amendments to the tax act:

*Amend Section 108(1) (a) to remove profession or vocation from this subsection and give it its own subsection with a threshold of $20,000.00 per annum. *Amend Section 108(1) (b) in respect of rental receipts and insert a threshold of $800.00 per month. *Add a penalty of 10% for non-compliance of Section 112 (withholding tax on gross contract payments). *Increase the rate of business tax on rental of property from 1.25% to 3% on rentals over $800.00 per month. *Apply a withholding tax on winnings from slot machines and table games, of 15% on winnings in excess of $1,000. *Amend the act so that in cases where a taxpayer has income from more than one source, the tax should be paid on the gross at the respective rate for each class of income, provided the aggregate gross income exceeds $20,000 in the year or $1,666.67 per month. *Administer EPZ legislation to the letter, disallowing any exemptions on fuel not used for energy generation or vehicles not directly involved with production. And last, amend the Income Tax Act for better tax administration as it relates to real estate agents, placing the burden of payments on the agent, and providing for special fines and penalties for violation.

   While we live in a new, revitalized and modern economy, many look on, unable to feel the new day because the new way demands new basic necessities to truly participate in our new society. In the past, we have removed import duties and taxes from most basic items, ranging from basic food items to electricity, water, stoves, fridges and even computers. The efforts of this government, providing new jobs and generating more credit through the DFC, the Small Farmers and Business Bank, lower interest rates, Youth for the Future, the Renewed Marketing Board and general economic growth have afforded most Belizeans these past staples, then considered as basics. But today, how can a Belizean explore the changing world if that Belizean cannot afford a computer? Long ago, we removed duties from computers. In some cases such as fridges and stoves, we took away the import duties but sales taxes still apply.

    In order to have these new basics reach all Belizeans, we will now remove import duties from a few last staples still paying duties: tea, salt, yeast, baking powder and toothpaste. Today, we also remove import duties from some new basic necessities - smoothing irons, metal buckets, Pampers, marley, linoleum, small table and floor fans, household telephones and scooters (50cc and smaller). In most cases, these items carried a 20% rate of import duty.

    Recently, we removed all duties on blank Compact Discs (CDs) for recording local music on the recommendation of the Ministry of Culture, and today, we continue to keep our commitment to advancing culture in Belize by now removing duties on all musical instruments and accessories, and all recorded music products including CDs, gramophone records, cassettes, DVD-Audio and music video cassettes.

    We are also removing sales tax from refrigerators (15 cubic feet and less) and gas stoves (regular 30-inch and less).

    In rebalancing, to stay fiscally responsible and share the costs of our new, more shockproof economy and society, today, we will increase sales tax on all of the other goods and services, except for telecommunications, by 1%, and the following items will join fuel, alcohol, and tobacco at the higher rate of sales tax: telephones (non- household), large fans, scooters (over 50cc), refrigerators (over 15 cubic foot), and stoves (other than the regular domestic gas stove).

Amendments to the Land Tax Act

    There are amendments to the Land Tax Act, which pays special attention to encouraging ownership and development of land in the South. While not increasing the tax rate in the country, we will ensure that those who own small properties and less than 30 acres, pay only a token land tax, while those who own larger properties will no longer have to seek out the Department to find out what they owe or to pay land taxes. The valuation process will be simplified by a modern and just system of "land declared unimproved" values categorized by economic location and use. Government will ensure collection of Speculation Tax by placing the burden of payment on the owner and increasing fines and penalties. Speculation Tax, of course, only applies to property over 300 acres by accumulated ownership where no productive use is being made of that land. On consultation, most landowners, including large owners, agree that a fixed system, which allows for proper budgeting and the relief of proper process, will improve our enabling environment. Again, here we are not increasing the tax rate, but rebalancing. We are making sure that Belizeans who can, pay, and those that need time to grow economically, are relieved.

    And this year, with $127 million being spent on Education and $57 million on Health, Belizeans have access to education and health like never before. Thousands more Belizeans own their own homes, and after today, with this rebalancing of growth, thousands more will be able to afford more of the new basic necessities. Our Belizean economy must work for all Belizeans! All Belizeans must have real hope for meaningful employment. We will not rest, until all Belizeans are working. 'By the might of truth and the grace of God,' we have come a long way! There can be no turning back!