Last week we told you about the IMF’s Article IV consultation statement on Belize which called on the Barrow Administration to seek further fiscal consolidation for the country’s long term sustainability. Among the measures the IMF recommends increasing GST to 15%, downsizing the wage bill, introducing a fiscal rule which would see the Government introduce legislation that target reducing debt to GDP ratio to 60% by the year 2025, implementing stronger management and controls for tax collection, phasing out Central Bank Government funding, and improving the business environment to attract investors. Today PM Barrow spoke on the IMF’s recommendations, saying he’s basically not listening to them.
Rt. Honourable Dean Barrow - Prime Minister of Belize
“Initially they had sought to insist that a precondition to a discussion ought to be Belize’s entry into an IMF program, we absolutely rejected that and we proceeded on the basis that Belize is quite capable of writing its own prescriptions and going its own way, the fact that we are not in any IMF program mean that while as a matter of courtesy and respect we look at what the IMF has had to say, there is absolutely no obligation on our part to follow any of it, and certainly with respect to the recommendations as to raising the GST and to doing away with exemptions and recommendations having to do with pensions and public officers we absolutely reject those as we have made clear repeatedly. We will always as I said be respectful and treat the IMF team with extreme courtesy but we absolutely will not follow any of the prescriptions which in our view would result, if followed, in a fracturing of the social compact.”
While GST did not see an increase in this year’s budget, electricity bills did as persons who pay over $100 now also pay GST on their consumption. The Government also increased its excise tax on beer, cement, and soft drinks.