7 News Belize

Talking Taxes With Fin. Sec.
posted (March 10, 2017)
The new budget will be presented on Monday, and all this weekend, government's number crunchers will be trying to come up with the right mix ox takes and expenditure to reach fiscal targets.

This year that budgetary exercise is more purposeful than ever since government has committed to specific fiscal targets, namely a primary surplus equal to at least 2% of GDP.

Right now there is a primary deficit. On Wednesday, the Financial Secretary explained how government plans to turn that negative into a positive:…

Joe Waight, Financial Secretary
"The commitment we made to the bond holders and to ourselves is to consolidate, to do an adjustment to take primary which is a measure of your savings, to take that primary from a negative minus one or so up to a half a point or a positive 2.5. How do you do the consolidation? A blend of tax measures and tax increases, a lift in taxes and also a squeeze in expenditure. There's an array of taxes you can look at. The budget will be announced on Monday so you don't have to wait very long but the Prime Minister said that he's not touching the business tax nor is he touching the expenditure side. Nor is he touching the wage bill. The wage bill has been growing in leaps and bounds and we have to at least try to contain it. We cannot squeeze it down but at least it's to arrest the growth as best we can. You do that by not hiring a natural retrenchment, but essentially what we have committed to do is to turn around from a negative position to a primary measure to a positive of 2 to 2 and 1/2 percent."

Jules Vasquez, 7News
"Let's be real, if we do not change the surplus as I often hear who will lash us? We are a sovereign nation. We don't have to enter IMF standby agreement. We may make our best efforts, but things happen."

Joe Waight, Financial Secretary
"But the problem is this, even before we get to some police matters your saying to lash you, the problem is you need to generate enough surplus to be able to pay your debts because if not you'll have to borrow more and get into a downward spiral. You'll get into a situation whereby you have so much debt that you are working 3 days a week to pay your debt and 2 days to live. Like in the case of some Caribbean countries in the past. The thing is you have to stabilize because you cannot really borrow anymore. The 91 percent of GDP, we cannot borrow anymore."

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