During yesterday’s Budget presentation, Right Honorable Prime Minister Dean Barrow informed that the Government is factoring in 50 million dollars in additional recurrent revenue for fiscal year 2016-2017. This comes directly from the increase in import duty on fuel products implemented in December 2015 and then again in February 2016. While, the cost of fuel on the world market is currently at an all-time low, and that has significantly decreased the tax and royalty that Government collects from local oil production, it is not expected that the world market prices will remain low forever. PM Barrow was therefore asked if the import duty will be revisited if things change.
Rt. Honorable Dean Barrow – Prime Minister of Belize
“We will of course have to do our balancing act and perhaps take off some of the import duties that we put on. While none of us knows what’s going to happen and even the experts—and so you would concede that you and I are not—even the global experts seem to be unsure of when that inevitable rebound will take place. I’ve seen schools of thought that suggest that we haven’t hit the bottom yet and that prices could go as low as twenty dollars and they will not start to go back up before the end of certainly the calendar year. So if and when that does start to happen, indeed we will have to manipulate the import duty application some more. By then of course, it will not be import duty, it will be excise. Part of what we are doing in the removal and moving to an excise regime on imported fuel and fuel products as well. But by the time we have to do that, if in fact we have to do it, I think we will be well on our way to making the target we set for ourselves. That fifty million or so that we say we expect to realize is conservative. There are experts who’ve looked at current volumes, who’ve look at the fact that people will now spend more and who therefore say that over a full year, we will get significantly more that the fifty million or so we budgeted for. So again, if towards the end of the year, there has to be an adjustment to see government getting less, we are confident that that won’t take place until a point in time where we would have already gone clear or be pretty close to it with respect to our revenue target.”
The government has said that since the fall in oil prices in 2014, there has been an overall savings of 1 hundred 63 million dollars. Of that total, consumers are keeping 1 hundred million while 63 million has gone to the government based on the increases in import duty on fuel.
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