On Friday, February 11th, the Government of Belize (GOB) and the Trade Union Congress (TUC) signed an 11-point agreement committing to work together to review the budget proposed by GOB. In the agreement, TUC set out to do two main things; the first being to review the recurrent expenditure of the budget with the objective of reducing expenses and the second was to review the National Trade Union and Congress of Belize’s proposals, submitted to GOB on January 31st, 2005.
The specific objective of the review was to determine whether, adjustments could be made to reconfigure the budget, while still meeting the fiscal deficit targets for the fiscal year. Work between the two began four days later, and after seven meetings and long, hard hours of debate there was little or no resolution.
Since a compromise on certain issues were not met, GOB decided to implement the following decisions in the interest of moving forward: The revenue measures which were delayed now took effect on March 1st, 2005 with the following changes: Environmental Tax was reduced by 1%, meaning that it will be charged at 2% instead of 3%. Business Tax on gas station fuel sales will continue to be paid at 0.75%, but the rate on their sales of other items will be charged at 1.75%. At the next sitting of the House of Representatives, Government will table legislation to raise the Excise Taxes on beer from $3.60 to $4.00 per gallon with effect from April 1st, 2005. In addition, on April 1st, 2005, GOB will implement the salary increases due to public officers and teachers through reallocation from Capital and Recurrent expenditures.
While there is an agreement on some tax measures, major differences on particular taxes still remain. The three major differences are as follows: 1) The NTUCB side has not moved from its position that the excise tax on beer should “bear the brunt” of any new taxes. GOB responded to proposing a small increase beyond the measures set out in the Approved Estimates 2005/2006. 2) The NTUCB side has not moved from its position that there should be no increases in Environmental Tax. The Government side responded to propose a reduction in the Environmental Tax measures from the levels approved in the Estimates for fiscal year 2005/2006. 3) The NTUCB side has not moved from its position that there should be no significant increase in Business Taxes, except for taxes on real estate agents and casinos and a small increase in trade and business. The Government side has responded with suggestions of small reductions in particular areas on the measures set out in the Approved Estimates 2005/2006.
On February 28th, 2005, a press release issued by NTUCB stated: […]NTUCB unanimously voted to exercise protest action to be undertaken in the upcoming days and weeks. Of particular concern to union affiliates, is GOB’s refusal to increase Excise Tax on beer to the level it stood in 1998 of $13.66 per gallon. This increase alone would have netted GOB some additional $23 million in revenues: without altering the price of beer significantly. This conclusion on the price of beer is deduced by the fact that in 1997 Excise Tax was $17.29 per gallon and the price of beer was $2.00 per bottle. The media will be kept fully informed of any proposed protest actions.